how to buy a house directly from the bank

Another hassle: Most foreclosures that go to auction get postponed, usually due to bankruptcy or loss mitigation (when the bank tries to compromise with the borrower), says Chris Matty, marketing director of He notes that opening bids also change frequently, especially as home values are marked down further.

One difference in dealing with the banks choice of agent is that the bank contact person will represent the bank only and will not clue you into what the house is actually worth if the bank is asking too much.
The house is listed at $200,000, when we called the listing agent she states that she has offers over $200,000 and this is what they are now looking for as an offer.
The cost they pay for a agent in establishing values, taking care of the property, addressing emergencies, dealing with the city authorities, and providing pictures with weekly or at least monthly updates on how the marketing or closing is going.
Why would the bank want to deal with you? You are trying to reduce the cost to you but the bank has to put more time in addressing your issues.
Now can anyone explain why this would be happening? The listing agent said the he has other offer at the time I placed my offer and he still says that he has a few offers right now.
Bank owned foreclosures in inventory are called REOs, or " owned." Banks will give these REOs to asset managers, who will in turn hand them off to realtors.
On the other hand, properties with fewer condition issues may be priced at market value, which may or may not defeat the purpose of buying REOs.
For example, a title search may reveal a being placed on the property, which will need to be paid off at closing.
A couple hundred dollars can spare you the embarrassment and ruin of needing to potentially shell out $50,000 after you discover that the whole property needs needs re-wiring, for example.
Not knowing about this lien could mean significant added costs to buying the property that you should know about before you close the deal.
When a bank can’t close a sale at auction, it sends that property to its inventory.
Because banks are in the business of making money, they price their REOs pretty competitively with the wider market.
When the bidding is done and you’ve got the property, see if the lender is willing to loan you the full price of the foreclosure — something that’s more common than you make think.
Bidding on REOs is different from bidding on a traditional property.
I’ve attempted to ‘chase’ some of the bank-owned properties from time to time only to become frustrated with the level of competition.
In this post, I’m going to talk about the pros and cons of buying REOs from banks.
If you are getting started flipping houses, this will help you decide whether to hunt for deals by targeting bank-owned properties.
It’s not that banks aren’t motivated sellers – but what I mean by “buying directly from motivated sellers” is buying directly from homeowners.
The competition is hot for bank-owns so our realtor is our best way to find them and offer quickly! Long lead times for banks to accept the offer is the biggest difference we find today.
Now that you know some of the pros and cons of buying houses from banks, you can better decide whether it is right for you.
Great analogy Danny & I find myself adjusting as we speak on new ways to find deals.
Visit his blog: Flipping Junkie – A House Flipping Blog to follow along with him as he shows, in detail, the marketing he is doing, the leads being generated, the lead and deal analysis, the rehabs and really, just about everything.
This got me to thinking about what the pros and cons to buying deals this way were.
For real estate investors and home buyers, bank-owned properties and REOs offer opportunities that are not available in the pre-foreclosure and auction phase of the foreclosure process.
The challenge for real estate investors is to reach the person who can make the decision to sell the bank-owned REO property.
“If the agent is unfamiliar with the process, of course [buyers] are going to be intimidated because they don’t know what’s going to come around the bend," says Michael Kenduck, who owns Cruse Real Estate, which has roughly 175 foreclosure listings for sale.
"I think over the next three years we’ll be seeing more foreclosed properties come to the market," says John Fitzgerald, president of Realty Connect USA Suffolk County.
"When I saw the offer accepted, I was kind of shocked because everyone was saying it was impossible to close a deal for a foreclosed property," says Oktas, 37, a first-time home buyer who is in the restaurant industry.
His experience was relatively painless, but the process of buying an REO or real estate owned property — a house owned by the lender, such as a bank — is usually much different from a typical sale.
Rates for the combined loan are a little higher — currently about 4 percent for a 30-year fixed mortgage versus about 3.6 percent without the money for renovations, says Chris Gonzalez, executive vice president at Academy Mortgage Corp.
Buyers interested in foreclosed properties can search RealtyTrac – after a free, seven-day trial, subscription rates range from $50 per month to $250 for a full year – which notes whether a property is for sale or not.
If it’s not yet listed, buyers can contact the bank directly and make an offer, but that usually works only if it’s a small, community bank with a decision-maker readily available, Blomquist says.
Buyers can put the utilities in their name before signing the contract if the lender refuses to do so, which is almost always the case; however, the purchasers must be comfortable with this arrangement, Klein says.
Many bank-owned properties are not yet listed for sale, says Daren Blomquist, a vice president with Irvine, Calif.-based RealtyTrac.
In addition to the work done by lenders as noted above, potential buyers of REO properties are entitled to having a professional appraisal or inspection completed on a property they are interested in before making any sale final.
But if you don’t have the nerve to approach homeowners in default or the cash in hand to bid at foreclosure auctions, buying a bank-owned property may be the best way for you to tap the hidden market of foreclosure real estate.
Once you find an REO property you would like to make an offer on, you should contact the bank in possession of the property directly and ask for the department or person who handles REOs.
If you keep a clear head, you might find that the time and frustration spent countering with the bank has paid off, translating into your owning a property for a lot less than you might have paid in a traditional sale.
Bank-owned properties are known as REOs, or Real Estate Owned (owned by the bank or lender).
The only real difference it that you are likely to have a bit more negotiating room, since the property is an REO that the bank is motivated to unload, rather than a property a seller has lots of personal attachment to.
According to real estate investment trainer and author T.J. Marrs, “when presenting an offer to purchase an REO, one essentially needs to follow the same procedure a realtor would follow.
In some cases, offer acceptance is subject to corporate approval within five days — a much slower turnaround time than is expected with traditional real estate transactions.
Prior to making an offer on any property, you’ll want to do a bit of research to obtain as much information as possible about the property.
Some banks have REO or “asset management” departments that handle the sales of these properties, making the process much easier for potential buyers anxious to make an offer.
Inquire whether any inspection reports are available, whether the property is being sold “as is” or if the bank plans to pay for any repairs and how offers should be presented to the bank for consideration.
Keep in mind that the bank must attempt to get the highest possible amount for the property and must demonstrate this to its shareholders and auditors.
One of the often-overlooked strategies for purchasing an REO property is to make an offer on it before the lender has listed it for sale.
Once a property becomes an REO, the lender clears the title of any liens, evicts occupants if needed, typically does a limited amount of repair and clean-up work to the property, and prepares documents for the issuance of a title insurance policy for the buyer.
In fact, Marrs suggests buyers have their earnest money already waiting in escrow, and send a copy of their escrow receipt to the bank along with their offer.
In recent years, some lenders have been willing to hold properties a little longer than usual, in order to benefit from steadily-increasing real estate prices.
Doing this ensures the bank of a short sales cycle and saves them the expense of listing and marketing a property.
These properties have gone all the way through the foreclosure process and become the property of the lender.
Of course this is done without the benefit of having the realtor to help you complete the paperwork.” Marrs suggests the following three strategies to improve your chances of success when making direct offers to banks selling REO properties.
I have heard from several real estate agents that people who list REOs have been known to try to block out those they aren’t representing, or that it is too much work to split a commission because of the added time and hassle of selling an REO.  This past week I heard a story about an agent breaking a key off into the door knob so no one could get in to view the house over a weekend.  I’m not sure what constitutes "unethical" and what constitutes "illegal", and it’s probably fair advice that an agent who will unethically help you get a house may be treating you unethically as well.  This particular listing agent may be an ethical one, but then again if he is representing you as the buyer doesn’t he owe you what any buyer’s agent owes his client:  good advice and to work hard to get you ownership of the house.  I’m surprised banks even allow listing agents to represent buyers as it seems like an extreme conflict of interest.
I tried to buy my REO last year straight from the bank and they refused — putting it on the market is the best way of gaining exposure to the property and getting the highest sales price.
Huh?  I said last year, in a slower, worse market, the bank wasn’t going to go for selling a house without listing now.  Now they’re even less likely to.
Sure, you could offer the owner to buy it, but unless you pay the full debt, the seller can’t sell it without either coming up with the difference themselves, OR getting the lender to agree to a "short sale", where the lender takes the loss.  A short sale can easily take 2 years, and the foreclosure process is typically not stopped for that.
Though foreclosures are often sold at a discount, they are often sold "as is", and often need substantial work due to differed maintenance.  Often it is difficult to get loans for them if they require work to get a certificate of occupancy.  And if you buy at the auction, you typically need cash, and typically can’t see the inside of the property ahead of time.  You are also responsible for all outstanding liens on the property if you buy at the auction.
No, the lender cannot sell it directly until they have bought it back at the public auction.  They have to follow procedures.  The bank doesn’t own it, the one that is behind on the mortgage payments does.
To find properties that MIGHT be repossessed, typically you leaflet an area where that you want to purchase in with an offer of ‘cash for properties’ and/or you put adverts in the property section in local newspapers.
Lenders are unlikely to take ‘unrealistic’ offers as they have a duty to secure the best price for the property on behalf of the person being repossessed and have to prove this if questioned.
Lenders will typically sell repossessed properties via estate agents in a ‘good market’ or via auctions when the market isn’t so good.
Lenders will often sell through auctions as here they can justify that they tried to secure ‘the best price’ for the person being repossessed.
Some will outsource the sale of repossessed properties to third party specialists such as LPA receivers, so be prepared to be ‘passed on’ to other companies and deal with them directly.
The lender has a legal duty to the person being repossessed to get the best possible price they can for a property.
However, you really don’t need to spend a lot of money finding and buying repossessed properties, you just need to understand how to find them and then appreciate the effort that goes into securing a deal.
Others will charge you hundreds to thousands of pounds to ‘teach you’ how to buy repossessed properties.
Just because a property sourcing company says ‘repossessed property at up to 40% below market value’ doesn’t mean it is.
LONDON (Reuters) – House prices and sales took off again in Britain last month, reflecting the economy’s surprisingly fast recovery, but the Bank of England stuck to its course and left interest rates unchanged at record lows.
Thomson Reuters is the world’s largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on, video, mobile, and interactive television platforms.
House prices have also risen due to a shortage of supply and because of foreign interest in London properties, pricing some people off the housing ladder despite government efforts to the contrary ahead of elections next year.
The BoE has said it is "vigilant" to the risks of an over-heating property market but that it plans to deal with it, if prices threaten to get out of control, first by trying to curb mortgage lending directly rather than by raising interest rates.
As demand outstrips supply, contributors to the survey expected prices nationally to rise by 5.9 percent a year over the next five years, nearly double the 3.1 percent forecast this time last year.
It has additional amenities such as a study, library and guest room attached to it; and it provides the type of security that you generally don’t find in other living spaces.
Anyone who has ever fantasized about living the American Dream knows that homeownership makes up a major part of that dream.
Although it is true that a home is the equivalent of major financial investment, the purpose that it serves is far greater than its monetary value.
You’re the landlord, tenant, interior designer, property manager, and head of maintenance of a property that carries a deed in your name.
Currently, the Mexican Constitution prohibits non-Mexicans from directly owning land within 31 miles (50 kilometers) of the coast and 62 miles (100 kilometers) of the nation’s borders – called “restricted property.” Right now, if foreigners want to purchase a home or condo along the beachfront or border, they must set up a real estate trust with a bank, wherein the bank owns the property “in trust” for the purchasers; or, foreigners can set up a Mexican corporation and have that corporation own the land.
With over a decade of experience in helping overseas clients to buy property in Poland for either investment or personal use, we have established a network of mortgage lenders that are willing to offer loans to non-nationals secured against Polish property.
Hamilton May is able to offer competitive mortgage products for foreigners and expat-Poles to buy property in Poland though our affiliated Polish mortgage broker Amtrust.
If you wish to apply for a mortgage and would like to know your eligibility, or you already have a mortgage secured against a Polish property and would like to improve your financial conditions, Hamilton May is able to help.
Mortgages for foreigners require a more detailed application process and each mortgage offer is made on a case by case basis, depending on the financial circumstances of the individual.
If you want to buy a home or property, what difference does it make if you go through a real estate agent or deal directly with the home owner? At the end of the day, you will have seen the property, liked it and will want to make an offer regardless of who’s selling it.
Generally a registered valuation of the property will be required prior to the bank or institution lending you the money however your solicitor will more often than note, put a clause in the sale and purchase agreement which say ‘subject to finance’ which effectively gives you and the bank time to sort out your loan.
A bank, broker or financial institution will be able to give you a guide on the price you can afford to go up to to buy a property based.
the main difference is that you will be dealing directly with the property owner in terms of price and any buying conditions you may have.
If you are serious about finding a new home or property, then you are best to contact a financial institution that offers home loans such as a bank, building society or mortgage broker.
Instead of paying the investor in one lump sum in six weeks time you pay the investor in instalments over several years until you are able to qualify for a loan with a bank and refinance the investor out.
You must also be aware that if you miss several payments with a vendor finance instalment plan or rent to buy scheme, you may lose the deposit you have paid and the right to purchase the property.
We have taken great care to ensure that the general information on this page is accurate, however vendor finance agreements are negotiated between you and a private investor so each agreement will vary.
Vendor finance is the perfect solution if you can’t qualify for a home loan from a bank.
Vendor finance is the term used for a range of methods to buy a home without using a standard bank loan.
The cost of your purchase will depend on how high a risk you are to the investor and how quickly you can refinance out of the vendor finance scheme.
You make payments to the bank and also to the vendor with the aim to refinance the vendor’s loan to a standard bank loan within two to five years.
As you can see, this method of financing a property can help a wide variety of people to own their own home regardless of if they qualify for a bank loan or not.
The terms of the vendor finance agreement will be negotiated between you and the investor directly.
You may be able to apply for the First Home Owners Grant (FHOG) at the time that you enter into a vendor finance agreement.
We can complete a full assessment of your situation and then if you do not qualify with a prime lender we can refer you to a specialist vendor finance company.
However you must have a clear credit history, stable employment and an excellent history of paying the vendor finance instalments on time and in full.
In this scenario, you will borrow 80% of the property value from a bank as this is easier to qualify for than a 95% home loan.
Although this is usually cheaper than vendor finance, it is still more expensive than a mortgage from a bank.
Although vendor finance is a very powerful method that can be used to help you own your own home, it can be a disaster if you do not understand the terms of the agreement.
For decades, foreigners have had to use real-estate trusts or Mexican front companies to buy beachfront properties, because Article 27 of the constitution prohibits non-Mexicans from directly owning land within 31 miles (50 kilometers) of the coast and 62 miles (100 kilometers) of the nation’s borders.
Mexico City –  The longstanding restrictions on foreigners buying property along Mexico’s coast and borders were loosened on Tuesday after Congress’ lower house voted on a proposal that drew stiff criticism from some quarters.
Mexico set up the restrictions to ensure national security and avoid the creation of foreign enclaves like the one that grew up in a former Mexican province known as Texas, where the foreigners eventually rebelled and split from Mexico.
Federico Estevez, a political science professor at the Autonomous Technological Institute of Mexico, also cited the benefits to foreign investment by simplifying ownership for foreigners.
"This is about eliminating the middlemen who, through trusts, corporations and front men, have made a living off the constitutional ban," Beltrones’ office said when he submitted the bill earlier this month.
The trusts and front companies have provided a lucrative income for banks, lawyers and notaries who are required to operate them, and the extensive paperwork has discouraged many foreigners from buying.
Buyers tend to believe that banks will do anything to unload foreclosures, including letting the buyer buy that foreclosure for 50% of its value or less.
When buyers watch TV news reports that sensationalize foreclosures or read headlines that foreclosure filings are increasing, it’s normal for buyers to automatically jump to the conclusion that banks are desperate.
Market value might be 50% less than the last time the home sold, but that foreclosure price will generally reflect the value of the homes around it.
If a home buyer or an investor wants to buy a cheap foreclosure, it’s easy to assume that all foreclosures sell for pennies on the dollar.
Where to Find a Cheap Foreclosure to Buy I often receive calls from investors asking me about buying a foreclosure very cheaply, and the truth is it’s rare to find such a listing in MLS .
Why the Price of a Foreclosure Can Appear Cheap You can buy a foreclosure generally for much less than its original loan balance, especially in a declining market.
To find a cheap foreclosure, buyers need to reduce the competition for that foreclosure.

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