Today, there are 67 listings marked as “bank owned,” 110 marked as “lender-owned,” and an additional 63 listings marked as “REO” in the Tucson MLS.
The name of the game with lender owned homes: patience. Banks, in general, don’t care about your timelines.
As long as there’s no bidding war for the home - as can happen when the lenders price the home to sell and FAST - then here’s how this usually plays out:
1. Submit an offer to the listing agent, who then submits it to the bank.
2. Wait. Sometimes wait much longer than the expiration date on your offer.
3. The bank sends back some addendums for you to sign, and may counter offer some of the terms of your offer. There are many, many pages of addendums, in which you give up a plethora of rights, agree to numerous bank-specified terms, and generally agree to abide by their rules, where they have lots of rights and abilities and you have none.
4. You deliberate. You consider. You sign the addendums and send ‘em back.
5. You wait. Again. Deal’s not a deal yet until the bank signs it.
6. The bank signs the addendum and sends it back via the listing agent. Sometimes, the bank even deigns to send it back within a day or two of them executing that addendum. So that they only eat a few days of your limited inspection period.
You want to buy a lender owned property? No problem. But be prepared to be patient. Some banks respond in a day or two, some respond in a week or two.
Actually, that’s nothing compared to the wait times for Bank responses on short sales. But that’s a story for another day.
Photo via Flickr, courtesy of zoomcityzoom
July 3rd, 2008 at 6:46 am
We bought a bank owned condo for our parents last October. It was on at $275,000. We offered, they ignored. Three weeks later they dropped the price to $260k. We offered $230k. They ignored for a while and then countered at $260k. I countered at $231k. They came back at $241k two more weeks down the line with a caveat that if the deal closed by 10/6 they would credit us $1000. It would cost us $100 more for every day it took us to close after the originally offered close day…which was now 20 days away. Luckily, I’m in the business. A mortgage broker friend got the loan through and funded, I beat the escrow officer like a bad dog (I’m a title officer, it was fun) and we closed on time, they didn’t get one extra $100 out of us. Half of the lenders don’t even know what their inventory is right now. I hear we’re going to have another flood of REO’s on the market in August.
July 3rd, 2008 at 9:28 am
Wine Dog - isn’t dealing with the bank fun?
It’s all about patience - and then making sure YOU can execute on time once the bank agrees.
If you can believe it, we closed late on one and the lender didn’t charge us the $100 per day. They took pity on us after we explained what a fool OUR lender was. That may be the last time I do an REO with a new lender on my client’s side.