You also will need to be approved for the mortgage up front and I recommend going as far as your lender will allow without an accepted contract (called loan committment). In a traditional sale, if you cannot get financing, the seller will let you out with our earnest money. In a bank sale, the only contingency allowed usually is home inspection. Once you're past the inspection period, you are at risk of losing your EMD.
Most times, the bank specifies the EMD required, will require that you use their closing attorney, and sign a bunch of as-is documents.
While you do not need an agent to represent you, I highly recommend someone who has been through this process before. Many agents in Charlotte have not done a lot of REO or HUD foreclosures and their clients are misrepresented. Work with someone who knows the process and will work for you.
Finally, the price. I just wrote a blog on this but in summary, it depends on many factors how the price was set. Sometimes the bank's rep (either a broker or appraiser) have never stepped foot in the home so the price may be inflated. Other times, there may be multiple mortgages or other liens that may cause the price. Depending on who held the note before (if the former buyer had a conventional loan vs. a VA loan), that will factor in the price. You need to make an offer based on the condition. The bank will, in most cases counter (unless there's already an offer) and you can go from there.
That's a basic rundown of the process and I haven't even scratched the surface.
Hope this helps
Your best is to find a Realtor to represent you and help you navigate through the purchase maze. If you found a bank owned house on Trulia, this means the house is already listed with an agent and the bank is paying commission to the listing agent to share with the buyer agent.
Engage the service of a buyers agent will not cause you any fee/expense, but you will get good advise on how to make a reasonable offer for the property (depending on the local market condition), and give you guidance on the procedures you have to go through to perform various inspections, escrow process through successful closing of the house.
It is highly recommended that you locate an experienced broker who has a strong background or who is currently dealing with REO (bank owned) properties, short sales and foreclosures. Purchasing these properties and the processes that go along with them have changed dramatically over the past six month. Successfully contracting and getting to the closing table within a minimum time (within 1-2 months) will require the expertise of a knowledgable broker.
The majority of my business is REO, preforeclosure, short sale and foreclosure properties. I just closed a deal (short sale) where the bank had not yet approved the short sale. I obtained bank appoval in 10 days!From beginning to end my client closed the deal in under 27 days! Fortunately, I've been able to close these type deals in under 35 days.
Bank owned properties are not complex deals, but will require a steadfast and knowledgable broker. I would not advise going it alone. Your chosen broker should handle all the details in a competent and professional manner. Banks do not respond well if being forced or pushed into a short sale by brokers seeking approval. They may intentionally put a request at the bottom of their 100+ stack of deals and take months to gain approval. You want your deal to be upfront and professionally organized from the beginning.
I wish you luck in your endeavor. Choose your broker carefully and you'll have an exciting and wonderful experience!
I'm an investor and broker in the Charlotte, NC area. There are a couple of ways to handle it. You need to find out if its listed first because if it is then the lender has a process for selling it active. If not, then there are a couple other ways of working this deal. You can 1.) wait for it to become available or 2.) contact the REO department of the lender and get it before its offered through an agent/broker. Its not a bad idea to have an agent handle this for you because they will see their compensation from the lender.
Another great way to buy these types of properties is when they are in pre-foreclosure (before they are sold in at the courthouse steps).
Best of luck,
If the home is a HUD home, you will need an agent as HUD requires a HUD register licensee to put the offer in through the HUD website. Otherwise, you can contact the listing agent of the foreclosed home. Keep in mind that the listing agent represents the asset manager of the property.