When you start the process of buying a bank owned home, it's important to understand that you are not dealing with a person; you're dealing with an institution. So don't expect them to act with common sense.
I put an offer recently on a house of $350,000 and it took us three weeks to get a response from the bank. Well, that was very disappointing to the buyer to say the least because he had agreed to $350,000 cash and they still took that long. Yes that's correct, cash.
Does buying a home "as is" mean that someone must accept it in its current condition no matter what might be found wrong with it?
Well, that's the other situation with the bank; they're going to require you to accept the home in "as is" condition. They've never lived there so that's what they want to impress upon, so you're going to have this big, thick stack of papers that basically says "I understand that there is no recourse if I buy this house." The key thing to remember when you buy - when you put a contract on a foreclosed property or any sort of distressed sale - is to make it subject to a satisfactory home inspection. That's the whole key, "subject to."
After a home inspection is done and maybe some problems are found with the home, is it possible at that point to renegotiate a sales price? And if so, how do you go about doing that?
That's the tricky part that a lot of people don't understand. There is one thing that I want to make sure everybody knows today: get your inspection done and if there are some major things found with the property, then you should happen to show up with that list when the appraiser shows up at the property. The lender must require these things to be done. If that's the case, then the bank who owns the property has no choice but to renegotiate because now they have that information and they can't say, "We didn't know that." That's the whole key.
Have you had any personal experiences where you were able to get the bank to actually renegotiate the sales price after the sales price had been agreed to?
I did just recently as a matter of fact; a house in Bellevue. The home was bank owned and we found out there was a big crack in the foundation. So we made sure the appraiser knew about the issue and then we went back and we got a bunch of estimates (three estimates to be exact) for what it was going to cost to repair the problem. So we got the price that they said was absolutely the lowest and then we got it reduced another $7,000 because of that repair.
My name is Monte Mohr. Your expert guide in real estate from Nashville Realty Company.
When buying a home, either to rent out or to live in, make sure to consider the quality of the local schools. Even if you don't have school-aged children, a home in a bad school district is much harder to sell. Rental units in bad school districts are also generally less profitable. Check this out.