The media has done a good job about talking about the number of short sale and bank owned properties are on the market.  In some areas of the Treasure Valley we do have quite a few of these properties active on the market.  As a buyer what does that mean to you when you are looking for a home how long will you wait for a response?

Bank owned properties can be offered on and closed usually within 30 to 45 days.  This is good for the buyer who wants to get in a home quick.  What to remember with a bank owned:

  1. If the property is priced competitively, we are seeing multiple offers on the same property OR an offer comes in quickly on a property (within the first two days of the listing becoming active).  You will need to act fast to be considered for the home.  Don’t wait to view a home.
  2.  Most banks give people who are going to be occupying the home the first look.
  3. Homes are sold “as is”.  Spend some time when viewing the home to get an idea of the obvious repairs that are needed.  When making an offer, make sure it is contingent on a home inspection.
  4. Remember that you will have to follow the bank rules on the offer.  They may have their own addendum, contract or other forms to fill out and they usually do not deviate from them.

Short sale properties still take some patience when purchasing.  The bank does not own the property yet, but the seller is asking the bank to accept an offer that is less than the amount that the seller owes on the property.  Many banks have streamlined their short sale process and we are seeing some approvals come through 30 to 45 days after submitting an offer.  BUT – most short sale still take a minimum of 90 days from offer submission to close so patience on the buyers part is required.  What to remember when purchasing a short sale:

  1. Some areas are getting offers quickly on short sales.  If you want to be the first offer in, don’t wait to view a home.
  2. If there is a first offer already on the property, make a back up offer.  Many buyers realize that they do not want to wait through the short sale process and they terminate their offer.  You will be next in line to be considered by the bank.
  3. Make sure the agent representing you asks a lot of questions of the listing agent so that you know who the bank (s) are, where they are in the process and what the expected time frame is on this particular home.  If you know you will be waiting 3 weeks for an update from the bank, it helps reduce your anxiety.
  4. Homes are sold “as is”.  Spend some time when viewing the home to get an idea of the obvious repairs that are needed.  When making an offer, make sure it is contingent on a home inspection.  Most sellers are not in a position to fix anything.
  5. Many banks are pretty firm on items that they will and will not pay for.  If your agent finds this out ahead of time, you will have fewer surprises and fewer expenses later in the game.
  6. Expect that you will not have an answer on a short sale for 90 days minimum.  If you get an answer before that, it is a bonus.  It is truly an exercise in patience.

Real estate negotiation is different when purchasing a short sale or bank owned property.  If you are educated on the process and know what to expect you can find some great properties at very good prices.

I would be happy to answer any questions about purchasing distressed properties.

Have a great week-end.

 

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