Bank Owned Homes For Sale
Making an Offer
Bank Owned Homes For Sale can be great buys. The following focuses on an overview of how it is generally done in Florida with a focus on real estate in Sarasota FL. Practices can differ by state and municipality.
This is a TWO PART article. We recommend reading Part One first.
In Florida, a common practice is for lenders to allow for multiple offers. This means that the house will come on the market for a period of time and the bank will collect multiple offers and then decide on the best one.
If the bank is collecting multiple offers make sure your offer is as strong as possible. If you really want the house, go in with your top price to begin with, instead of looking to negotiate. You don't want to lose the home over an offer that is only a few dollars more than yours.
How soon can you close or buy the house? Although there are no hard and fast rules, it is common for closings to happen within 30 to 45 days. You outline your closing date in your offer. The sooner you can close on the home, the stronger the offer.
Include a deposit or earnest money check with your offer. This money is held in escrow, usually by an attorney or title company. It comes off the purchase price of the home, so you will be credited at closing for it, Deposits of 2% to 8% of the purchase price are common. The more money you put down the stronger the offer.
If the deal falls through because of a contingency specified in the contract, you will receive the money back unless you opted to back out of the deal for no reason. In that instance, the bank can elect to keep the earnest money as compensation for its hardship.
Many lenders outsource the selling of the home to a company that manages the foreclosure process, so you may not deal directly with the banks when you negotiate your offer. This can make the negotiation process slower because offers have to go through an extra approval level.
Once an offer is accepted, the bank's legal department generally requires additional "addendum's” to be signed. These addendum's vary from bank to bank, but they are a standard operating procedure when buying bank owned homes for sale. They focus on protecting the bank's liability. Once all the addendum's are signed the offer is considered officially "accepted."
Title & Closing
The bank is obligated to give you a "clean" title. If there are any title issues, they will surface when a title search is done. Foreclosed homes for sale may have liens from contractors or neighborhood associations attached to them which must be paid by the bank before the title can transfer.
Banks generally want to close with their own title companyand will offer to pay for the owner's title insurance. This can be quite a savings depending on the sales price. However, these title companies can be very busy because they are handling many transactions at a time, so they do not always answer your questions or get back to you in a timely manner.
Purchasing bank owned homes for sale can be a great opportunity. However, before making your decision, it is important to be aware of the considerations.
We recommend enlisting the help of an experienced real estate agent. This will make the experience easier and less overwhelming.
Also see Part One of Bank Owned Homes For Sale
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