(Closed) Interested in a REO Forclosure

posted 4 years ago in Home
Post # 2
Member
950 posts
Busy bee
  • Wedding: August 2015

Is it common/allowed in your area for a home inspection to take place before you’re under contract? My husband and I just bought our first home so I am not an expert or anything, but I wasn’t aware it was really a thing for a buyer to have a house inspected before making an offer. The results of the inspection will be a contingency so if it does turn up things that are deal breakers, you can recind your offer. Do you have a realtor you can ask about this? They would likely know the best course of action.

Post # 3
Member
84 posts
Worker bee

you are better off putting an offer in and then doing inspection…banks can be tricky and sometimes even if you are the first offer in they might not accept it or go with a different offer….imagine paying an inspector and not being able to purchase home because they took a different offer?

You can always back out of an offer if the inspection report has too many issues or if you feel that you got in over your head. 

Post # 4
Member
3838 posts
Honey bee

Make sure it is a real inspection. Too many are cursory inspections (for lending purposes) and miss the real underlying issues. Spend the extra money, especially on a foreclosure, where there is more likely to be issues like mold, stolen wiring, corrosion, pest infestations, sewage backups, shoddy historical repairs, and a variety of other concerns caused by neglect. This is a decent overview: http://www.bobvila.com/articles/1471-10-things-to-consider-before-buying-a-foreclosed-home/#.Vwxm74RifVo 

Also, make sure the title agent doesn’t just do a lien search. They need to search for all open permits, code violations, and other unpaid municipal charges. These are not extinguished by foreclosure nor typically covered by title insurance. If they haven’t arisen yet to lien status, they won’t show up in the title report and you can be out a lot of money in the future.

Also, is there an HOA? That opens up another list of potential issues.

Oh, and once you close, rekey every single lock.

Post # 5
Member
3838 posts
Honey bee

Oh, and make sure you do a walk through immediately before (e.g. day of) closing to make sure there are no squatters. You could spend a lot of time and money evicting someone. And rekey that afternoon. Have the locksmith ready to go.

Post # 6
Member
2600 posts
Sugar bee
  • Wedding: October 2010

Talk with your realtor about possible penalties for putting in an offer and then withdrawing. Some states are very buyer friendly and you can withdraw your offer at any time, for any reason, without penalty. In other states, putting in an offer and then recinding it may cost you several thousands of dollars. 

Post # 8
Member
1993 posts
Buzzing bee
  • Wedding: April 2018

We just bought a relo house. Make sure you have a realtor that is ready for all they will throw at them. If we didn’t have ours, I don’t think we would have bought the house. It was insane amount of paperwork. 

Post # 9
Member
5088 posts
Bee Keeper
  • Wedding: December 2014

cristinamarie92:  Yep, I would put the offer in contingent on an inspection. Also, you mentioned that you were in contact with the listing agent. If you don’t have a realtor representing you, you should get one. It’s always better to have your own realtor on your side.

Post # 11
Member
7449 posts
Busy Beekeeper
  • Wedding: October 2014

Keep in mind that banks are not in the business of real estate. They are not looking to get into complex negotiations, contingency sales, or counter offers when it comes to foreclosed homes. They want someone to give them money as fast as possible so they can get that house off the books. Depending on the area, you could be competing with developers or investors who usually come with cash in hand. If you are trying to buy with a mortgage, you are already at a disadvantage, as the bank will usually take a lower all-cash offer rather than wait 45 days for a mortgage to come through. You want to move as fast as possible, so bring your inspector with you when you tour the property, be prepared to put in an offer on the spot, and don’t get hung up in trying to get a discount for anything in the property that needs to be repaired. Obviously in some  parts of the country, foreclosure homes are a dime a dozen and any qualified buyer will be able to have their pick, but your realtor should be advising you on the market, the competition, and how much flexibility you have in your offer.

Post # 13
Member
5948 posts
Bee Keeper
  • Wedding: May 2014

cristinamarie92:  I’ve never heard of an inspector coming with you. It takes a few hours to do a proper inspection. We made an offer on a house, it was inspected, found to have fatal flaws (so much so I reported them to the city – long story) and we took back our offer. Of course we were out the $400, but at the same we didn’t move into a house where the plumbing would flood us out or the electrical would start a fire.

Post # 15
Member
2494 posts
Buzzing bee
  • Wedding: August 2015

Where I live, after you put in an offer and it’s accepted, you do the home inspection within 10 days. If there are any issues with the inspection that would make you want to back out of the deal, or if you and the sellers can’t agree on who will pay for what repairs, you are allowed to do so. The only money you lose is whatever you paid for the home inspection.

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