Handle REO's On Time

Buying a bank owned (REO) property is a much different process than a traditional listing and it is imperative that your Realtor know the difference. If your Realtor is not aware of the differences, they could not only cause you to lose the property, but also cost you money in the process. Let me explain.

When a bank owns a property, they have complete control over the situation. They have the ability to make the rules and do not have to follow any disclosure requirements. The bank will typically have you, the buyer, sign an addendum which will give them full disclosure to the process, and leave you with no protections.

They set out a timeline you, as a buyer, have to meet or face the consequences. While they don't have to deliver anything until they feel like it. For instance, I have a bank owned property in escrow right now that I got approval on almost a month ago. Guess what? The bank didn't open escrow until three weeks into the 30 day time period.

It took a full three weeks before we received my contract and addendum. Not so lucky for us that when we first signed into this contract, it stated that we would be charged $100 per day per Diem for every day that went past the thirty-day period!

Then they did nothing on time to make it possible for us to make the deadline. As many of you know, the majority of short sales do not close successfully. This is usually due to the listing agent not knowing how to do them, but taking the listing anyways. If the listing agent doesn't put in all the work ahead of time, a short sale is a nightmare. REO's can be the same. In this case, the listing agent assured me that he had done all the footwork and the bank was ready to move.

Submitted by: B. Stein knows all about shopping new homes for sale and properties in general. Check out his other posts online.