What you Need to Know ...
When Purchasing A Bank-Owned or
Insurer-Owner Repossessed Property!
¨ Before you submit an offer you must have a Loan Approval Letter from an acceptable Mortgage Broker or Bank for the amount of the offer. An offer will not be considered without a Loan Approval Letter.
¨ Financial Institutions will decide on your offer normally based on the highest price net-less concessions—that is acceptable to them. Financing will also be taken into consideration. The stronger your ability to close—as it appears to the Bank—the better chance you have of a successful offer.
¨ Preview the home before submitting an offer. Financial Institutions and Insurers are exempt from a Real Property Disclosure Statement and have never occupied the property and will not represent to you anything about the property condition.
¨ All Lender owner properties as sold in AS IS condition without representation or warranties as per NRS 113 waiver to be executed.
¨ Get a Home Inspection from a Licensed Home Inspector to minimize risk. A Home Inspector is recommend, although not required. Since there is no walk through, the Home Inspection will take its place. Normally, after an offer is accepted, you will have 7 to 10 calendar days to do this inspection. (Auctions normally do not allow inspections after accepted bids). Home Inspections are at the Buyer’s cost.
¨ Keep your offers simple. Since properties are “AS IS”, concessions will not be given for repairs. Lenders normally will not pay for Home Warranty Plans.
¨ Common interest community transfer fees or contributions will not be paid by Seller. However, periodic fees and assessments may be prorated. Required Association Documentations by NRS statures in many cases are not supplies. It is recommended that the purchaser orders the documents to understand the condition of the Association.
¨ Title Company Selection. The Seller will select the Title Company and Escrow Agent. Normally, they have prior Corporate Contracts to provide this function. A Special Warranty Deed will be provided, which gives free and clear title to property and is lender acceptable.
¨ Close on time. A Lender Addendum will be executed as a part of the contract. In the event you are not prepared to close on time, a penalty will be imposed. This is usually $100 per day or a percentage of the property value per day. Be prepared up-front if the Seller is late, he is not penalized. Select a closing date that is realistic for you.
¨ Cooperate with your Lender and Agent. We are all a Team. Providing required documentations must be priority during your transaction period. Telling the truth and acting as a Team is a recipe for success.
¨ Be prepared for multiple offers because Repo Homes are normally good values other buyer frequently make offers on the same home if the price is below market. The key to success is to avoid procrastination in making an offer on a property well below market value as others will want to buy that property.
¨ Deal with an Agent who is well versed in Repossessed Properties and understands the mechanics of these types of transaction and who is also networked with Bank Representatives who will respect—and believe—you offers and requests.
¨ Follow your Agents and Lenders advice.
¨ Be patient. Response time on Bank Owned Properties may be from 2 days to 2 weeks. Don’t assume anything, especially that the clerks know what’s going on.
¨ Remember, when you receive your Counter and Bank Addendum, it is normally not signed by the Seller and the Seller may look at other offers until your contract is signed by them.
Have Fun Making Money!