This may seem obvious as a starting point but if you want to buy a Bank Owned Bargain, either as an investor or as a an owner occupier, you have to make offers. More accurately you need to make offers, in writing, in the proper format.
You should be aware that with Bank Owned properties there is very little risk associated in making an initial offer, but it is also very important that you avoid making frivolous offers, “just to see what happens”. I will advise you if your offer has no chance, although I have to submit it if you insist
Most importantly you don’t have any money at risk. For some time now we have consistently been making offers with no money on the table. We do not put any money in Escrow until later in the process. You do have to demonstrate you have the ability to buy either by offering proof of funds or a solid mortgage pre approval.
The banks NEVER accept an offer outright but ALWAYS send a counteroffer. Even if they accept the price you offer , they will rewrite the contract into their own format (addendum), and send it back for signature. They will often change something, such as the Escrow deposit amount, the inspection period or the closing date. Even if they don’t the fact that they send more paperwork constitutes a counter. At that point your original offer is replaced with a counter that you don’t have to accept. If you don’t want to go forward, all you have to do is wait past the acceptance date and the contract is voided.
In the last few years I’ve lost count of the number of offers I’ve submitted on Bank Owned properties. Every one is different and you have to make sure you have all the paperwork correct and that it goes to the right place and most importantly you have to FOLLOW UP. Otherwise you may sit for a couple of weeks waiting for a response to an offer that never got past the listing agent.
When we write an offer it is done on an ASIS format. This means that you have the right to inspect the property, after the price is agreed and reject it without penalty, if the inspection is not to your liking. A professional inspector will always find something to comment on, so you always have an out. Again let’s not make frivolous offers and then use the inspection report as a cheap out. The sellers will quickly get to know you (it’s a surprisingly small community) so my reputation suffers, and your offers get ignored.
Usually you can hold off sending the escrow until after the inspections are completed. The title company can’t open a file to accept the money till they have an executed contract, and that often doesn’t happen for several days. Get the inspections done fast and if it needs too much work bow out briefly.
Our current experience, and we have plenty of it is that only about 10% of offers get accepted, so you can’t hang back. Any property worth buying is likely to have multiple offers. However if you do get one accepted, and then decide you don’t want to go forward for whatever reason there are a number of ways to get out. Remember the banks have lots of buyers for these properties so if you are not committed they’ll move on fast.
If you are looking to buy a Bank Owned Bargain, nothing is going to happen until you start to make offers
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