Frequently Asked Questions

Will I get a clear title to the property?

The short answer is yes.  When the bank goes through the foreclosure process, it has to contact any person or entity which has a lien of the property (asset).  This happens in the courts and through “tracked” mailings.  The other lien holders can pay off all the senior loan and have the right to control the mortgage amount, or let the foreclosure continue, where as the bank eventually owns the property. Sometimes clerical errors are made in which case this process has to start back at a certain point.  The Seller (Bank) only has control over the title and therefore this is the item in which they have control.  They will NOT make the buyer close without Clear and Clean title, unless buyer wants. (Something I do not suggest)

How long does it take to get an answer for an offer?

Typically, it takes 1 to 2 business days.  Keep in mind, though the Asset manager approves an offer, sometimes the offer needs to clear approval by another level of management.  During this time, the seller generally does not entertain any other offers. Typically, inspection timeframes do not begin until final approval is given, but days begin before a fully executed contract is received. (Inspection days begin upon verbal approval)

Can the buyer get inspections, and how long do they have to complete their inspections?

A general rule is 7-10 calendar days, though some backs will allow business days.  Always try to calculate the inspection days based on calendar days to be safe. The bank is selling the asset in “As Is” condition. They no NOTHING about the asset, but want the buyer to know what they are buying.

Can the buyer hire a contractor to complete  WDO (Wood Destroying Organism) and Appraisal required repairs?

The sellers only want authorized Licensed and Insured contactors hired by the Listing agent to have any work completed.  There are several reasons, but this is why they are selling the asset in “As is” condition.  They do not want to do any repairs to their asset.  Some banks will let the listing agent  contract for the repairs if this cost is added to the purchase price. Some sellers will absolutely not allow any repairs and will consider any contractor TRESPASSING. It is best to check with listing agent on an individual basis.  The best way to overcome this hurdle is to secure a Rehab-Type loan, or expect to add the cost of repair to the purchase price.

What type of financing is available? Do the banks offer special financing?

Most of the assets are offered for Cash or Conventional financing.  Many of these homes will be able to go FHA or VA, but the banks do not want to guarantee the asset will pass the appraisal for those types of financing. For the first time home buyer or owner occupant, the FHA 203 loan is the best way to go.  There are other loans such as a conventional loan called a Rehab-Permanent loan. Both this and the FHA 203, the buyer borrows enough to purchase the home and to have a licensed contractor complete the repairs after closing with the Seller.  Some Bank owned properties have their own financing available ONLY for their assets. For Owner occupants the down payment ranges from 0-3.5% and for investors as little as 10% down payment. Much better than the 20-40% down.  Of course there are also closing costs, but that is another subject.

Do you have to get a septic inspection?

As of today, we have not had to get a septic inspection to satisfy any closings, but highly suggest getting a septic inspection for your own information.

Does the bank have any previous inspections?

Most to the time, the banks do not have any WDO, Septic, Home or any other inspections information, nor do they have a survey.

Will the bank pay for closing costs?

The answer is yes and no.  Some banks consider all the closing costs a buyers cost, while other consider some minimal costs theirs.  An experienced Foreclosure Agent, can help you craft an offer to help you get the best usage of your cash.

Will the banks look at a lower offer than list?

Of course they will, they will even counter your offer if they feel it is  a realistic offer.  The banks are in the business to dispose of their assets, but they are not willing to give their properties away, at least at this time in our area.  There is nothing wrong with negotiating, but if the perceive your offer as ridiculous, do not expect a reasonable counter offer if any.

How long does it take to get an answer on an offer?  How long does it take to close on a bank owned property?

Offers on most bank owned assets take 2-5 days and sometimes sooner. 
Most loans only take 30-45 days to close, mostly depending on the time it takes the buyer to get all the info to the lender.  If there are title issues, the closing will be delayed.

Does the bank have any previous inspections?

Most to the time, the banks do not have any WDO, Septic, Home or any other inspections information, nor do they have a survey.