There is a big misconception in today’s market that a buyer’s market pertains to all potential home listings. NOT!!! Bank foreclosure sales have become the new fad to buy where buyers are purchasing homes at significantly discounted prices. But, buyers must be aware of the 8 important facts to know when purchasing a bank owned property:
1. Make sure to get pre-qualified by a mortgage lender before looking at any home. Banks require a pre-qual letter with all offers. Cash buyers also need to provide proof of funds when submitting a written offer. You will also know your payment options and understand the financing process before executing a purchase agreement.
2. Bank owned properties are sold in their As-Is condition meaning that they will not make minor repairs to the property and do not warrant or guarantee anything related to the property. Remember, the bank has never seen the property before.
3. Make sure to hire an expert inspector to thoroughly investigate the unit for defects that may arise. Banks will fix or give a credit for major functional problems such as the roof, a/c unit, or water heater.
4. Make your best and final offer! Most likely, you will not be the only potential buyer for a bank owned property. It is imperative to make a very strong offer and include the highest amount of escrow money that you can afford to show the bank that you are serious and that they should take your offer over the competition!
5. Make sure that your Realtor calls the listing agent to see if the home is still available, and there is not already multiple offers on the property. If the home already has offers, it is a very good chance that you missed the boat.
6. Work with a Realtor that specializes in bank foreclosures and short sales. Even though the market has many distressed sales, it is imperative to work with an agent that truly understands the process and can help answer all of your questions and concerns.
7. Be prepared to close quickly, as banks want to get the home sold and off their books as soon as possible because of the fees and carrying costs.
8. Make sure that you work directly with the title company in order to clear all liens on the property. I recommend that you hire an independent attorney. Banks usually pay for the owner’s title policy in order to require the buyer to use their own title company. You need someone looking out for your best interest. so hire an experienced real estate attorney. It will be money well spent! Bank foreclosures can have multiple liens on the property, so it is important that clear title is provided before you sign on the dotted line of the closing statement.
To stay updated with all of the current Parkland real estate information, receive our blog posts directly to your inbox by subscribing to the squawk.
If you are interested in buying or selling real estate in Parkland, please give us a call at 954-609-0591 or send a note to the squawk.