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Buyers Due Diligence when buying a bank owned foreclosure
Do your due diligence when making an offer on a bank owned property. Everything should be taken care of by your agent, bank and title company. Sometimes you never know, somethings might fall through the cracks.
Here are a few things to check on
- Get a property inspection, enough said.
- Make sure to follow up with the city on Truth In Housing requirements. Some cities don’t have Truth In Housing.
- Contact the city for current tax and assessment information.
- Make sure no squatters or renters are occupying the property. (It happens, I’ve heard stories)
- Is there a well or septic tank on the property? Verify with county or city regarding requirements.
- Check with the homeowners’ association, if there is one, to see if there are any delinquent dues, transfer fees and any assessments.
- Call the city and county to find out about any assessments for unpaid utilities, sewer and water bills.
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Foreclosures and Short Sales in the Twin Cities Update
Foreclosures and short sales in the Twin Cities accounted for 34.1% of the closed transactions in quarter three according to a report published by the Minneapolis Association of Realtors.
Lenders are seemingly discounting properties at steep prices to get rid of them and thus dragging down prices even further.
The foreclosures and short sales are starting to move into the upper bracket section of the market as well. Now prime mortgages are starting to feel the affect. Foreclosures increased from 166 to units to 207 in the $500k-1mil price range, a 24.3% increase. For homes that are over a $1 million, foreclosures increased by 81.3%.
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Lender Foreclosure Auction coming back to Minneapolis November 15 & 16
Back again is another lender foreclosure auction on November 15th & 16th at the Minneapolis Convention Center. Public open houses are on 12pm -4pm on Novermber 1st, 8th and 9th. Bring your inspectors for your pre-inspections because once the gavel drops, it’s official!
Don’t know where the convention center is, get directions here.
Let me know if you are going, we can meet up!
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Search bank foreclosures now available
Now available on this site is a new foreclosure search that allows you to search foreclosures. I have gone through and created links to individual cities for a hyper local search or you can start your own REO search.
What makes this so good is the optimized map search that is blazing fast by Diverse Solutions. Well, that’s not the only thing that makes this so good. Get neighborhood information if you unfamiliar with the area, see what kind of local amenities are nearby.
Create an account for free to save your searches for review later. If you like RSS feeds, subscribe to new listings via a RSS feed. A wide variety of tools are available in the search as well such as mortgage calculators, school info and your very own Zestimate from Zillow.
Having trouble finding what you are looking, chat with us in real time when it is available via the live chat feature located at the top of the search box. So there you go, knock yourself out and happy REO hunting!
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Low Balling on a REO or Foreclosure…
Well… Yes and No
Now that I have your attention, can you really lowball a bank on one of their properties and win? It can happen, you don’t know until you try. The question is, how bad do you want the house? You also want a good deal but banks are well informed when they list a house.
The usually have a BPO or Broker Price Opinion up front so they have a idea of what the market is doing, even though they are probably a couple of states away. Some banks even hire an appraiser to also give the value back to the bank.
So where do you start?
If you are going to make a low offer, have some comparables to support your offer. Do your homework in the area, compare some traditional homes for sale to REO properties that are also for sale. Some REO properties 10-30% less in some areas, I’m just saying, not all areas but some.
Make an offer that you think is right, what you are willing to pay for the property. Banks will usually comeback with counters, but stick to your guns and say it is your highest and best. Make sure your financing is in line or cash. Just because an offer is cash doesn’t always mean they will think it is better, it’s all about the bottom line.
Factors that might influence
Days on market is always a factor, if the house has been on the market for ages. They just might be willing to part with the property pretty quick. Most lenders like a non contingent buyer that can close fast and has no strings attached. The biggest of course is the bottom line, it all has to look good on their books.
Sometimes it seem like there is no rhyme or reason to the madness, that is for sure. They might accept one offer that doesn’t make sense or deny another offer that is solid.
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