THINKING OF PURCHASING:
REO's (Real Estate Owned) PRE-FORECLOSURE, REPO's (Repossession) OR FSBO (For Sale By Owner)?
 Hire a reputable home inspector! Many homes have incurred damages by the previous owners or by vandalism and much cannot be seen by just doing a walk through.
It is your right to have the home inspection subject to the purchase. However, you may want to make sure your offer is contingent on termination if the damages are far greater than originally disclosed or expected.
The home inspector may discover additional damages and this could be an opportunity for the buyer to negotiate some repairs. If you are still willing to go forward, contact the bank and renegotiate the deal with the new information from your home inspection report. The bank may be willing to lower the price and you may get a well-earned and valuable price break.
Many of the repossessed properties were and will be, purchased as fixer-uppers and will be showing up on the market as a For Sale by Owner. These types of properties have been purchased and some repairs made in order for the seller/owner to flip the property. It is very important to have this property inspected. We have found that the work may have been performed without permits and may not be in a workmanship like manner or have health and safety issues.
Many home buyers hire a contractor to prepare a cost analysis to fix the damage after receiving the report from the inspector and then present these findings to the bank. Once again, this won't always work on "as is" but can be very effective as it gives the bank the opportunity to see a real list of the damage with details of the costs that it will take to repair.
The bottom line to buying a bank-owned property is to get pre-qualified as a borrower, get the house's damage pre-qualified with your lender to review the possible challenges in the loan before making your offer, don't plan on the bank's willingness to "give the house" away, and be patient for answers and willingness to negotiate.
As your home inspector we are here to be at your service if you should have questions or concerns. Please contact this office.
We perform inspections for banks on REO's, and Repossessed Properties. Call for your quote. |
