Banks Slashing Prices to Get Rid of Foreclosures

If you are looking for a deal, you should be keeping your choices open to Bank Owned REOs.  Although, you’ll be surprised in this market…there are now multiple offers on these homes.

As banks try to off load these homes, they are slashing prices to bring in many buyers and multiple offers, creating bidding wars.  Be prepared giving your highest and best offer the first round of offers to avoid a counter offer from the bank with multiple participating parties.  The prices could be pushed further up.

There are some important things to be aware of when buying a bank owned REO:

• The home is usually conveyed “as-is” – the bank will not make any repairs, the seller will make no warranty to the buyer, expressed or implied as to the condition of the house, fitness of the property.
• The seller is still to disclose any material fact, but since the bank has not lived in the home, there will be no sellers property disclosures or CLUE report to show of any insurance claims on the property.
• Regarding the appraisal-a failed appraisal based on the condition of the home (missing A/C, mold, missing appliances, etc.) will not allow the buyer to cancel to get their earnest money back.  The as-is addendum overrides the contract, that includes an appraisal contingency.   If the appraisal comes in low,the buyer cannot use the appraisal contingency.  It is imparitive that the appraisal be done in the 10 day inspection period.  If 10 days is not long enough, extend the inspection period when you submit a contract.
• Another concern is the utilities being turned off – it can take a day or two to get them back on.

If you are buying, do your homework and make sure you have a good agent that has your best interest in mind.