Anyone have any info on how this is done? We are looking to move within the area, and there are several empty houses due to foreclosure we are interested in.
Do we still use the Real Estate agent, or deal with the bank directly?
Some of these places are in tough shape; the last owners typically trash the place as they clear out. How is that figured into it, or doesn’t it mtter?
Thanks.
“I am the master of my fate, I am the captain of my soul.” Invictus, by Henley.
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If these have actually gone through the foreclousre process then they belong to the bank.
Generally they will do a minimum in terms of securing the property, haulling out the trash, and then listing it through a real estate agent that specializes in that kind of property.
It can take a 3 to 6 months for them to do all of that. Also in some states there is period for redemption so they might hold it until that period of time.
In general they are sold AS IS. They won't do anything. And often the banks are very very very slow and responding to your offers. But they are only interested in money offers. And most likely if you want to inspect the property you will have to pay to get the utilities turned on. Or make adjustments in your offer for worst case conditions.
And if it is listed then you might as well get your own agent and they can do things like check how long it has been on the market and how the asking price has changed.
Now if it has not yet gone on the market and it is owned by a small local bank then you might try contacting them. But in general banks won't deal with you.
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It can be a difficult and long process. Depends on the bank and current legal status of the property. Frequently if the property has been cleared by the bank for sale, the bank has retained a Realtor to handle the process. Keep in mind everything is negotiable, depending on the demand for houses and the particular property you are interested in. But the downside is most of these sales are "as is", no allowances for carpet ,roof, etc. The bank is looking at their net proceeds from the sale so if there are competing offers for a property, the one with the best net offer will win, not necessarly the highest sale offer. So keep in mind if mutiple agents are involved, closing costs, etc all impact the net number the bank sees.
Sometime the bank will list a minimum offer amount, sometimes it's a range and you have to try to find out if there have been other interested parties submitting bids. Comes down to, who ever shows their number first, loses.
I just closed on a house in San Clemente that I put an offer in back in May. It took the bank 6 months to sort through it and get back to me. They had 3 higher bids that couldn't qualify, finally I won. I had completly forgotten about the house until I got a call from the bank informing me I had been selected and was I still interested. I got to re-negotiate because the value of the property had fallen since my offer was submitted and since I was the last bidder standing I was in the drivers seat. I pulled another $50k off my offer and they took it.
Out here we are seeing a number of houses that have already been on the market, for whatever reason, and eventually when they don't sell, the banks foreclose on them. So there might be a For Sale sign out one day, but not the next, but the house remains empty and in limbo.
Although I've talked briefly with the agent about foreclosures, I got the impression the banks turned them around as quick as they could, as they were losing money with it empty. But I might have misunderstood.
Even if it takes a while, it's not too big a deal, since our house has only been shown to two people, and its been on the market a month.
Thanks for the info. I guess my next step is to have a detailed discussion with my agent. Though I've never fully trusted real estate agents; although they want you to buy/sell, their commission could get in the way of complete honesty.
"I am the master of my fate, I am the captain of my soul." Invictus, by Henley.
Realtors are paid a percentage of the sale price, it's always in their best interest to get the highest sale price no matter who they are working for, thus the conflict and distrust you mentioned. I have a Realtor who works on a negotiable percentage based on the amount of work she has to do. I have paid her as little as 1% just to push the paper work through on a sale. It's all negotiable and they are hungry. Good luck.
Experienced, but still dangerous!
"How is that figured into it"
I would definitely figure as a buyer that the previous "owners" did not have money for upkeep if they did not have money for payments. So at the very least, a years worth was neglected, probably much more. anybody can fall on hard times, but the general rule would be that they kind of person who does not plan ahead enough to be able to make the mortgage payment is the kind who is far less likely to think of things like maintaining the drainage clean, clearing the gutters, paint, furnace tuneups, etc.
A good HI is always a good idea, but absolutely necessary for this kind of purchase. Then once you know th e condition of the property, discount problems into the offering price.
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Good point, I hadn't thought of that. And by the condition of some of these, it's valid.
Saw one today where the whole north side was green with mildew/algea/fungus. Not it's most winning side. The yards were rutted where trucks had backed up to the doors (in the rain), the doors and walls splattered with mud from spinning tires.
Saw two a month ago, they were nearing completion when the bank took possession. Plumbers, HVAC and electricians came in and cut out all the components, carp took the cabinets. The agent had it listed for $399k, but all that was left was a finished frame with drywall. I figured it was gonna take a good $150k minimum to get a CO. "I am the master of my fate, I am the captain of my soul." Invictus, by Henley.
Google "foreclosure tours" (I'm not kidding).
I heard an interesting radio piece a while ago about a realtor that was organizing bus tours that drove people around looking at foreclosed houses, like vultures over carrion. I'm sure you could get the whole rundown about how it works from such a tour.
Scott.