Home Buying in Michigan>Question Details

Danel Powell, Home Buyer in Detroit, MI

i am interested in purchasing a reo property. i checked the taxes and utility bills. i have not spoken with

Asked by Danel Powell, Detroit, MI Fri Feb 15, 2008

the realtor yet. what should i do next for this cash sell?

Help the community by answering this question:

Answers

5
Get a buyers agent, in Metro Detroit there is normally not a charge to you.
0 votes Thank Flag Link Fri Mar 21, 2008
Danel, I suggest you getting a buyers agent that can protect you buying a foreclousre...especially being a cash buyer. You do not want to get in over your head. I would find an agent that knows their stuff regarding purchasing this type of property.

I hope this helps! Best Wishes to you!
Web Reference: http://www.gomelinda.com/
0 votes Thank Flag Link Sun Mar 9, 2008
If you are considering purchasing a foreclosure in Southeastern Michigan be sure to read the report available at http://www.MIforeclosureDeals.com . The report will help prevent surprises at or after closing. Many people purchase foreclosures and then find out later that they really didn't get a very good deal at all. If you are in Southeastern Michigan this site can also provide you with FREE lists of foreclosures.
0 votes Thank Flag Link Sat Mar 8, 2008
Danel, I can agree with Danel, find a buyers agent that works with foreclosures to help walk you through this deal. You are responsible for doing what's called due diligence (items Danel mentioned and more) including verifying any local government required repairs. Once you sign, this could be a lot of cash down the drain. Better to get your own private inspectors and possibly a contractor to go though the home. It's better to spend several hundred dollars than to loose several thousand.
Web Reference: http://mi-living.com
0 votes Thank Flag Link Fri Feb 15, 2008
Buying a bank owned home:


In brief here are the details:

You must put a minimum of $1,000.00 down (unless it is a HUD home then $500.00 is expectable if the home is priced lower then $50,000) and have a pre-approval letter from a lender (some banks want you to be pre-approved by them, but you do not have to use them, however they will try to cut you a deal to use their services) they will not even look at your offer with out this. If cash deal they will want proof fo the cash, IE: bank statement.

Most of them still follow the guide lines that you have a 7 day (includes week ends) inspection period. So you would come to an agreement on price and then have the inspection period, to decide based on inspections if you still want to purchase the home. However not all follow this guideline, so make sure the inspections do not have to be done prior. The home is sold “as is” no repairs will be made by seller. If you decide not to buy the home based on inspections, you will get your earnest money (also know as good faith money) back.

Your offer can NOT be based on the sale of your home. No contingencies are accepted.

It can take 1 day or a month to hear back from the bank on your offer. If you are buying a bank owned home (REO Real Estate Owned) and need to close right away, as you are selling your home or your lease is up, I advise you to be pre-pared to have somewhere else to live in the meantime, as this may not close when you want it to. However the savings may be worth the wait.

How long will it take to close, is one of the questions I get asked the most. So far my experience is they have closed on the date on the contract, however not much before that date. I envision a guy working in a small office with piles and piles of files and is getting to them as fast as he can. Not just one person at the bank makes the finial decision. The bank has to prove to their investors that this is the bet possible price they can get.

There is general feeling out there by many buyers, that this bank should just want to dump this home, I will go in a low ball the price, and they should take it. This is not the case. In most situations they do not take much off the asking price; however they will continue to drop the price till it gets sold.

Title work is usually done by their title company (they make it very hard to work with a local one) However, depending on who they choose, it sometimes makes sense to pay the higher amount for the title policy to do a split closing and use your own title company. I have run into many problems with “their” title company. So far I have caught the mistakes made by their title company, but this makes me nervous, as I am NOT a title person. Some of things I have run into:

They do not warrantee their work
They do not understand Michigan laws; due to the title company is from another state.
They do not check for liens
They do not pay off the liens (seller is responsible for all liens on property, unless other wise negotiated)

I urge you to find a buyers agent who has experience in buying bank owned homes.

good luck!
0 votes Thank Flag Link Fri Feb 15, 2008
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2015 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer