Eleven things to be aware of when considering buying an REO Property!
Eleven things to be aware of when considering buying an REO Property! These are a few of the most important pitfalls to consider:
Approximately two years ago, I wrote a blog post (http://activerain.com/blogsview/1383023/buyers-beware-when-considering-buying-foreclosures ) about things to be aware, when considering buying a Foreclosure home. Needless to say most of the points are still valid.
1. Do not presume that it is a good deal. Do your research of the comparable properties and then be wise as to what you are offering to make sure it is worth what you getting it for.
2. Banks and Asset Managers are not emotional; they are rather rude at times. Do not expect it to be like a “normal” purchase. They might not respond to your offer. They might not respond in a timely manner to name a few of the issues. It is strictly business, not necessarily good business manners, but definitely impersonal.
3. Do not be shocked when you walk into the home for the first time. Either it will be totally trashed or totally stripped including the toilets and door knobs missing or full of debris.
4. Sometimes you might even find squatters living or being barricaded in the home.
5. There might be a great deal of damage, either owners taking out their frustrations or just due to neglect. There might be visible signs of water damage from the roof on down.
6. Do not expect to get any Disclosures from the Bank or their representative. This home you are definitely buying “as-is” and the responsibility to do your investigation is 100% on you the buyer.
7. Expect time delays at every turn. If you are a cash buyer than it is easier to handle than if you are purchasing the property with a loan.
8. Do not expect credits from the bank for anything; be prepared that if it is due to your “fault” they might even charge you for delays that they were ultimately creating by not responding in a timely manner.
9. Most importantly be prepared that there will be fierce competition from investors who are seasoned and savvy. For example short investigation period and short escrow period with all cash will generally trump a “normal” offer.
10. Banks will have their own disclosures for you to sign and basically you sign your life away and will be impossible to take recourse against the bank if you discover things later that you were not aware. For example that the Sewer was blocked or damaged and many other things.
11. Banks will make you use their Title & Escrow Companies. Even though it is illegal now to do that, never the less they found a way around it. If you do not use their companies there will be a Charge so high in addition where it does not make economic sense to use your own.
Since I wrote my original post many others have started echoing my points, here is one example, check out what HGTV had to say:
If you are a consumer who is considering buying or selling a home, investment real estate, vacation homes, or beach properties in Southern California, Los Angeles, Century City, Westwood, West Hollywood, Beverly Hills, Culver City, Marina Del Rey, Venice or Malibu. Feel Free to give me a call at 310.486.1002 or emails me at firstname.lastname@example.org or visit one of my websites at https://www.endrebarath.com Your Pet Friendly Realtor. I contribute a portion of my commission to Local Animal Rescue Organizations.