REO’s – Everything you ever wanted to know. Part 2 – How to buy a REO home

admin May 15th

Purchasing a bank owned home is not unlike the purchase any other home from its owner. Find it, visit it, fall in love with it, have your agent write and submit an offer, and wait a few days until the bank gets around to either accepting your offer or sending a counter offer. Sounds simple, doesn’t it?

Well it is if you are working with an agent who is experienced in REO transactions. We can give you a list of current REO’s in the Vancouver Washington Real Estate Market and, more importantly, we can guide you safely past the hazards that can hide in these types of transactions.

But, what if you choose another agent who isn’t up to speed on these types of purchases? Here are just two of the most common and expensive pitfalls that can be encountered if you choose an agent who is inexperienced in this type of buyer representation:

1. TITLE / ESCROW- In bank owned transactions the bank always chooses the title insurance/ escrow company. A title insurance/ escrow company is supposed to be an impartial 3rd party to the transaction. An experienced agent will tell you that they aren’t impartial in REO transactions and we work hard to save our clients from paying “junk fees” that are designed to compensate for the deep discounts that they are giving to the bank (seller). This past week we caught a title company charging our client over $800 worth of junk escrow fees. Most agents would have missed these extra charges and you would have been stuck overpaying! BTW, it was $800 on a $110,000 purchase. That is .72% of the purchase in OVER CHARGES. It brought the escrow charges up to 1.4% of the entire purchase. OUTRAGEOUS!

2. INSPECTION- Did you know that common knowledge is that all REO sales are “As Is” sales? Or are they? Just because it is listed as “As Is” in the listing doesn’t mean that you are stuck buying a home that has a fundamental defect. We can guide you through this potential mine field and get you through to the other side with a home that is everything of which you dreamed.

These are only 2 of the major issues that might be encountered. What do you do when the banks try to take away your rights to the state mandated disclosure statements? or if they demand that you pay their obligated closing costs? or what if the HUD shows up and you owe all of the unpaid HOA dues for the past year? What if they try to charge you $100 a day for every day that the closing is delayed? (With a minimum of 7 days!)You will wish that you had hired a buyer’s agent who was experienced and confident with REO transactions.

The purchase of your new home may be the largest financial transaction of your life. Why would you ever even consider using a real estate agent who isn’t the most experienced agent available? By the way, did you know that a buyer’s agent is free of charge to the buyer? In Vancouver Washington real estate transactions the seller pays the real estate commissions for both the listing agent and the buyer’s agent. Find the best and most experienced agent possible. You have nothing to lose and everything to gain!