Today, I realized that the process of acquiring a bank owned home is still confusing to many so I decided to shed some light onto this. Here you go:

Bank Owned homes are properties that a lender has foreclosed upon a buyer’s default on his mortgage. The property is listed for sale in the MLS thru a Real Estate MLS broker. One thing that all Bank Owned homes have in common is that these homes are advertised for sale  “AS IS.” That means that the lender does not want to do any repairs. This is true at some extent. You will be buying a home based on your own visual inspection. However, if there are major defects that you did not identify but a licensed inspector did, you have the right to negotiate these repairs during the inspection period.

Once you decided that this is the property you want, your Realtor will help you prepare the offer in a State promulgated contract. You are not obligated to pay the listed price. Moreover, we always negotiate a better price for our clients. Your offer shall include the terms to negotiate like the sales price, earnest money deposit (typically 1% of the sales price), seller’s contribution to closing costs (up to 3 or 6% fo the sales price), inspection period (typically 10 days), home warranty (min $350), survey ($350 min), HOA fees, closing date (30, 45 or 60 days), and financing terms. Your offer will need to include your lender's pre-approval letter.

Upon receipt of your offer, the lender will more than likely counteroffer until you both agree,

Once all the terms have been agreed between the buyer and seller, the lender will mandate that you also sign their sales contract addendums that will include the terms previously negotiated.

Upon execution of the contract by both parties, the contract and the earnest money are sent to the Title Company where they will proceed to do a title search to make sure that the property is transferred to the buyer free and clear of any liens.

As soon as the contract is signed by both parties, we advise our buyers to order their home inspections ($300-$500 typ). If your inspector uncovers major defects on the property, we request the seller to make repairs, otherwise the buyer should terminate the contract and the Earnest Money deposit returned to the buyer.

If the buyer is satisfied with the property or with the seller’s response, you should proceed to order the appraisal, survey, deed restrictions, and home warranty.

All the above contingencies should clear with the first 30 days of the contract and you will be ready to close on your home.

There is another category of foreclosed homes: Government Owned homes a.k.a. HUD homes.

These homes are purchased thru a bidding process on the internet. Typically during the first 10 days of the listing. Also here, a HUD-approved REALTOR will help you prepare the contract offer. If you are declared the winner, your Realtor will be contacted and the process will proceed very closely to the one outlined above.

If you have more questions, please do not hesitate to Email meor contact me at 713-589-3234 for more information.

How can I find these bank owned homes?

As we want to help you locate these lovely homes, we grant you FREE access to our exclusive list of Foreclosed Homes in the Houston metropolitan area. This list will readily update you on the latest  foreclosed homes available for sale.

In order to gain access to our Foreclosed Homes Lists, please go to:

www.HoustonAreaBankOwnedHomes.info

It is completely FREE to you.

As a By Referral Only®, and C.D.P.E, REALTOR® , I am committed to providing such extraordinary service and expertise that you will gladly refer your friends, family and acquaintances. With your help I am able to build strong business relationships one person at a time.