What to Really Expect When Buying A Bank Owned Property

The agent regretfully Real Estate Experts Las Vegas NV advises him his house is worth $340,000 today and by the time he pays commissions, closing costs and late payments to the mortgage company, he will have to write a check to close his house for $30,000.Joe can't afford to do that so when he fails to make his mortgage payments, he is eventually foreclosed on by his bank, and evicted from his home.Now, the bank has a foreclosure sale or auction. Buying a bank-owned property is often a great opportunity but is also has its challenges.I spoke with Dan Humeston, with Century 21 Moneyworld, who is considered one of Las Vegas' top REO agents. No one in this market today is busier than Dan.A recent report listed Dan as the number one producing real estate agent in Las Vegas so far in 2007 and by a far margin. I understand he is currently #3 nationwide for all Century 21 agents.I asked Dan, who is a long-time expert in REO, what you can do to make sure your offers are accepted and also what you can expect when making an offer on a bank-owned property.Dan says agents and their clients have to understand what they are getting into before moving forward. Here is what you need to know.#1) KNOW THE HOUSE AND HOW THE LOAN APPROVAL PROCESS WORKS ON BANK-OWNED PROPERTIESBanks are exempt from providing you with a real property disclosure. Therefore, before you even think about making an offer you have to do an initial inspection of the house. You want to understand what damage has been done to the home and what your lender says about it. Some of this damage may not make it through the lending process and you need to be aware of that before making your offer.Items like a damaged roof, broken windows, AC and heating problems, exposed wiring, or missing flooring can make it so your lender cannot loan on that home. Before making an offer, make a list of the repairs that you see that need to be done. Go over this list with the lender and the appraiser then decide whether or not to move forward.Dan says this is the number one problem he faces today on offers. The client makes an offer but has no idea how the repairs necessary will affect his loan. The bank knows what damage will not make it through the lending process and may reject the offer simply because you haven't done your research.Knowing if the home is able to get a loan on it is something that needs to be done before you make an offer. The house has to qualify just like the borrower's do.#2) DEALING WITH REPAIRSA quick tour of REO properties and you soon discover that people going into foreclosure rarely take care of the home at the end. It can take four to eight months for a person to be foreclosed on. They sometimes get angry and knowing they are losing the home anyway, they fail to maintain it in a satisfactory condition. It is not uncommon during your tour to find dead landscaping, broken windows, holes in walls, stained carpet, broken fixtures, missing appliances, and much worse.Banks will often ask that you buy the property "as is." You probably assume this means none of those items will be fixed should you decide to buy the home.