Quite a Professional Buying Process
Remember, you are not directly dealing with the property owner. You are buying it from the bank, who consider the property a mere asset that it wants to get rid of. Bank is not at all concerned whether you want to live in there or rent out to someone else. You need to wait for a few days for a response from the bank. Don't think of sending a nice introductory note to the bank directly or through your property agent. Bank's agent doesn't show any contract or any documents to the bank. They just collect the data and puts it in the website or software. Bank just sees the bidding numbers and that's it. There is no personal contract, no meetings, no conversation – nothing.
Don’t Expect Disclosures
REO stands for “real estate owned.” Bank is the legal owner of the REO property once its gone through the foreclosure process. In an REO sale, you cannot expect any disclosures. Consider it a blind sale, where you don't have any information about the home and the neighborhood. You are responsible for the property you are going to buy. So, it is advised to have a visit to the city's building apartment to collect some information. Seek your agent's help to obtain the past disclosures of the property.
Be Ready To See Homes Stripped Bare
You happily bought a foreclosed home, really excited to see the home interiors. And it all turns into a nightmare when you see that the previous owner has removed every appliance and light fixtures and even the faucets. Quite often, homeowners try to keep the property or even try to sell as a short sale, but as banks don't cooperate, they find it ideal to damage the property before leaving. Ultimately, it damages the real estate value of the home. You, as the buyer, are solely responsible for all the repairs.
Bank Won't Credit Or Repair Things
Investors wouldn't know whether there would be a broken water heater or a leaky window, since there won't be a disclosure. As a buyer, you are just allowed to have an inspection, so make sure you get the most out of this opportunity. Try to get your hands on an old inspection report and review every fact and figure before making your offer.
Bank Will Have Its Own Systemic Way of Processing Applications
Bank is not liable to follow any norms, terms and conditions that are standard in property investment community. Bank has its own contracts that are meant to protect its interest. A contract with dozens of pages safeguarding bank from any potential future lawsuits. Ultimately, this lays a lot of burden on the buyer. Bank won't transfer the property unless the entire process is done as per its regulations.
Landlords can find a few tempting deals among foreclosed homes. Make sure you get more than you bargained for. If you have more questions about foreclosed property deals, feel free to ask our consultants at Rental Home Financing. We will be happy to walk you through the real estate market.