With so many foreclosures in Colorado, buyers are considering bank owned properties when looking to purchase a home in Colorado Springs. Before you make the decision to purchase a bank owned property, take time to do your research. The foreclosures that are not sold at auction are then returned to the bank and classified as an REO (Real Estate Owned) property. There is no longer a mortgage loan to be paid on the home since the bank owns the property.
Do not make the assumption that you will get a good deal for a home just because it is bank owned; the bank still wants to get as much as they can out of it. Transactions for REO properties differ from those of other home sales. The listing agent will require paperwork with original signatures and will present the offer to the bank by fax, email, or overnight mail. If you would like the bank to give your offer consideration, make sure to accompany it with a pre-approval letter. Depending on the bank, it can take a few days or more to receive a response.
Many banks will verbally counter-offer through the listing agent until an agreement is reached on the purchase price of the home. Expect to receive additional required paperwork (addenda) from the bank that will amend the contract. Review the addenda carefully as they override many items in the contract you submitted with your agent. For example, the bank may only give you a certain amount of days to inspect the home and in many instances will not make any repairs since the property is "Sold As-Is."
The inspection is often for informational purposes only and if the utilities are off or if the property has been winterized, it will be at the buyers' expense to turn the utilities on and de-winterize the property for the inspection. Most transactions for home sales can be completed within a month or less but this is not always the case with REO properties; banks have their own timelines.
If you are a buyer and do not have time to waste, I do not suggest bank owned properties. On the other hand, if you are an investor, understand the process, and have the time, you may find a bargain. If you are considering purchasing an REO property, I encourage you to obtain professional counsel from a real estate agent or attorney as this article is for informational purposes only.
Search for homes in Colorado Springs
For more information on Colorado Springs Real Estate or the Colorado Springs Area contact me or visit my website.
Comments(0)