How do I find bank owned properties? (for sale, foreclosures)

[Jkgourmet]

We've looked at several condos - and the ones we liked, both the unit itself AND the price, were short sales. We did not come here intending on doing a short sale. And the more we've learned about them, the more turned off we get.

The properties that are stiil being sold traditionally do seem overpriced - based on prior, recent sales data (which I guess includes short sales?).

I've read here, and receive the suggestion from others, that we should investigate bank owned properties. How? Our current realtor is steering us away from this idea (but I think we will be steering away from him pretty soon for a variety of performance concerns.)

[TamRE]

I sell short sales and bank foreclosures all the time. Here is some info that might be helpful to you.

Buying a Short Sale

Buying a short sale is not like buying a property in a traditional way. A short sale may have some risk but it also can be very rewarding. When you are searching for a short sale you will want to make sure you are prepared. Here are some things you will need to consider.

First of all, you need to make sure that you have enough time. It takes anywhere from 30 days to 6 months or even more to get an answer on a short sale. It really depends on many factors. It requires a proof of funds letter if paying cash or a pre-approval letter from a lender if obtaining a mortgage. The seller must approve the purchase offer before it gets submitted to the bank. The bank may come back with a counteroffer or reject your offer completely. In some instances you may not even hear back from the bank at all. Quite often the bank may ask the sellers to sign a promissory note to pay back a portion of the mortgage.

Short sales take a long time because the bank has to review it and they are back logged with many short sales and don't have enough coverage to complete them in a timely manner. The bank typically is willing to work with the seller and buyer on short sales to help avoid foreclosure.

One of the benefits of buying a short sale is that the bank is typically willing to accept less money for the property because of the time and risk involved. So you generally are getting the home at below market value.

If you have the time to wait, a short sale is a good way to go. One thing to be sure to ask when purchasing a short sale is, "who is handling it?" Is the Realtor an experienced short sale expert? Or is the listing agent using a Short Sale company that strictly focuses on short sales? By having someone with knowledge and expertise in short sales, it will make the process go much smoother and faster.

Buying a REO/Bank Owned Property

Buying a foreclosed property can differ in many ways than other more standard transactions. All offers are contingent on financing and must be accompanied by a pre-approval letter. Some banks require a pre-approval letter from a certain lender, so be sure to read guidelines before submitting an offer. All cash offers require proof of funds with the letterhead of where the funds are being held and the buyers name listed. Actual account numbers can be blackened out, as long as buyers name is easily visible. Write your offer as seller chooses the title company as they have already started preliminary title work on these properties.

All offers must be written offers, on an As-Is contract only. Some banks supply addendums in advance, and if that is the case it will be in the MLS as an attachment and should be signed and dated and submitted along with your offer. In most cases, however, the bank addendums are provided only after buyer and seller come to agreement. At that time, the bank will send their bank addendums/counter offer for buyer's signatures. Please note at this point, the bank has still not signed anything, and most likely will not sign until ALL forms have been signed by the buyer. Your offer is considered a pending contract until it is returned from the bank/seller with their final approval. In the interim, all offers that come in must be presented. When signing and initialing a bank addendum, do not alter it in any way or it will be rejected.

The usual time frame for a response to your offer is 3-5 business days, although sometimes a little sooner and occasionally a bit longer. Allow plenty of time for acceptance, and for closing the deal, 30-45 days in most cases.

If you are requesting seller concessions for buyers closing cots, pre-paids, or repairs, make sure those are requested in the written offer, as adding these things at a later date can be very difficult and most times impossible. If you are writing an offer for an FHA or VA purchase, please make sure the property will meet the standards for this type of financing. The majority of the time, repairs are not permitted prior to closing. Ask the lender if they allow the buyer to escrow their own funds for repairs.

Once you have a fully executed contract, time is of the essence. All inspections must be done in a timely manner according to the contract. Should the buyer not be accepting the conditions, written notice must be obtained prior to end of inspection period along with a signed cancellation and release form. Some banks will make earnest money non-refundable after the end of the inspection period. Read your addendums carefully.

Please note that bank owned properties closings are considered mail-aways, because the title companies that are used to close the transactions are usually located out of our general area. Some will send a mobile notary to the buyers agents office to close the transaction and then all documents are overnighted to the title company, but it is not considered officially closed until all original documents and funds are received.

[TamRE]

Any Realtor can provide you with a list of bank owned properties for sale.

[Jkgourmet]

Re: bank owned properties

Ask the lender if they allow the buyer to escrow their own funds for repairs.

Why would the buyer want to escrow their own funds for their own repairs?

[CCRESI]

#1 the Agent should NOT be steering you away from anything, as this is unethical.

Any Realtor can comprise a list of Bank owned properties. My suggestion- find an agent and stick with them. If you signed an agreement with this Realtor, please review it prior to using another Realtor. If you plan to work with another agent, explain to your current agent that you guys aren't a good fit.

Some short sales are already bank approved, which means they can have quick responses/closings. I wouldn't rule them out completely.

Good luck to you!!!

[equalrightsforeveryone]

Originally Posted by Jkgourmet

We've looked at several condos - and the ones we liked, both the unit itself AND the price, were short sales. We did not come here intending on doing a short sale. And the more we've learned about them, the more turned off we get.

The properties that are stiil being sold traditionally do seem overpriced - based on prior, recent sales data (which I guess includes short sales?).

I've read here, and receive the suggestion from others, that we should investigate bank owned properties. How? Our current realtor is steering us away from this idea (but I think we will be steering away from him pretty soon for a variety of performance concerns.)

Listing book account it's free, you can set your own criteria. Many agent to choose from.

[Big House]

Originally Posted by CCRESI

#1 the Agent should NOT be steering you away from anything, as this is unethical.

Any Realtor can comprise a list of Bank owned properties. My suggestion- find an agent and stick with them. If you signed an agreement with this Realtor, please review it prior to using another Realtor. If you plan to work with another agent, explain to your current agent that you guys aren't a good fit.

Some short sales are already bank approved, which means they can have quick responses/closings. I wouldn't rule them out completely.

Good luck to you!!!

If CCRESI is trying to get you to sign an agreement with her as a buyers agent, watch out. I wouldn't do that under any circumstances! That is crazy. All the agents are willing to find bank owned properties. I know that one of them you've talked to represents many of the asset managers who handle the banks properties that they put up for sale. You can work with any agent you want to.

That said, if you do work with an agent, be considerate enough to have them be the ones that ALWAYS let you in every property. Otherwise the cut-throat agents and all of them do this will claim you as their client so they can trap the all of commission, and they all seem too happy to tell the agent you worked with for weeks and months to back off, and they will have too - weather you like it or not.

I am not an agent, but I do know how that works. I've seen it happen to many agents over the years. I do buy and sell a lot of property JK, but you will never see one of them.

[CCRESI]

Big house-NO. You misunderstood what I said. If JK signed with his current Realtor as a buyer's rep, then he should read it to be sure the agent didn't throw a cancellation charge in it. Also, if Realtor 1 showed JK a home but Jk bought it through realtor 2, realtor 1 could go after the commission as probable cause. I have seen this a lot. And sometimes the buyer ends up having to pay Realtor 1 their commission. Just protect yourself and work with one agent that is a good fit.

[freddyCF]

Originally Posted by Big House

If CCRESI is trying to get you to sign an agreement with her as a buyers agent, watch out. I wouldn't do that under any circumstances!

From my point of view CC has only been providing very useful info to these boards and nothing else.

[kroeran]

Originally Posted by TamRE

Any Realtor can provide you with a list of bank owned properties for sale.

Aren't bank owned publicly listed on any agents mls online feature like short sales and normal listings?

Usually the description discloses this status?