"Bank Owned" Properties--What's the Big Deal?
I've heard many buyers and agents express disappointment in the bank's unwillingness to drop significantly from their listed price point. In summary, the comments I've heard go something like this, ""They should have taken our offer...it ended up selling for less---serves them right!"
Serves "who" right? A "bank owned" property is priced and negotiated via a standard process. The fact is, the negotiations are almost predictable based on "time on market", the earnings quarter in which a potential "close of escrow" will occur and other factors specific to the organizations set process, procedures and overall goals. Taking an emotional stance with a bank is like punishing your car by not putting gas in it. Simply put...it's counterproductive.
Timing and realistic expectations are the two most important ingredients in the successful purchase of a bank-owned property. General rules to consider and abide by to avoid wasting time and causing yourself stress are:
1. Don't expect a bank to make an overly generous concession shortly after being put on the market.
2. Don't expect a bank to make any repairs
3. Don't compare a transaction with a bank to a standard "seller/owner" sale; you will be setting yourself up for disappointment.
4. Have a strong grasp on the big picture and don't get caught up in the particulars.
5. Ask questions regarding what to expect from the bank by asking the listing agent in advance.
6. Ask the listing agent for a copy of the purchase contract addendum that the bank will require to be made part of the contract. They will rarely sway from these stipulations, so why not avoid any future disappointments by reviewing this before considering an offer?
7. Ask the listing agent if there have been previous offers and if so how long did it take for the bank to respond, how much did they drop from the list price and anything else that may be important to you. Your agent should be able to assist you in identifying issues that may be unique to bank owned properties and that may affect your decision to purchase.
Like anything in life, attitude is everything. With the wrong expecations, you'll end up wasting your time and/or set yourself up for an unpleasant and stressful transaction. However, if you understand what you're dealing with and know some of the simple rules and possible procedural exceptions, you can find some very good deals. Remember....a bank will never say, "We don't have to sell."
MKR Realty has a continuous inventory of foreclosed properties. Feel free to call to inquire about our current inventory and/or new listings soon to come on the market!