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Bank owned properties REO’s and Foreclosures
1. Although the seller may agree to your offer, until the bank signs off on all the paperwork you are still at risk for someone else submitting another bid and the bank accepting it. I have been fortunate so far this has not happened to any of my buyers but I have spoken with other agents where their customer has lost their bid.
2. Once the offer is accepted, the bank will present an addendum they will require your signature on as well.
3. In some circumstances you may be competing with multiple offers. You will always want to present your highest and best offer to START as you may not get a second chance.
4. Another concern with bank owned that we have to be aware of is the time frame the bank has owned the property. With FHA financing your lender can only secure the loan if the bank has owned for 90+ days. We will need to watch that carefully. Does not apply for USDA.
5. Title issues – allowing time to clear these up. I had a situation recently where a customer was buying a bank owned and the title did not come back clear. The buyer waited 45 days for the bank to clear the title so the buyer could purchase the property.