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Bank owned homes are great deals and they will literally take ANYTHING!!! Right? NO! However, that a common misconception. Every market has REO properties and the Myrtle Beach real estate market is no different. REO properties offer great opportunities for a lot of buyers but there are some things you need to know before jumping into this part of the market.
An REO property is a property that is being offered for sale after the lender has foreclosed on it. These properties are usually one of many and sometimes thousands in a bank’s asset portfolio. They are assigned an asset manager who relies heavily on the listing agent’s market information provided to them. Their job is to move the house off of the bank’s books as quickly and cheaply as possible without increasing the bank’s liability. Sounds great right? Of course, but there is always a catch.
Negotiations are much different. When you negotiate with a seller you typically are dealing with someone who shows emotion over your offer and their house. A bank shows no emotion. They have no tie to the property other than the note they still hold on it. They will not enter into complicated negotiations and they are not swayed by a buyer’s hardship. They have no knowledge of the property or it’s condition and therefore will make no representations as to the condition of the property in the past, now, or in the future. These are “as-is” properties and are sold as such. Their goal is to be completely done once the ink is dry on the closing documents.
Does this mean that you don’t get the opportunity to do inspections? No. You ALWAYS have the opportunity to do an inspection and I encourage you to do one on every home, even new construction. What this does mean is that no repairs will be made to the property and anything you do find will be your responsibility.
Be prepared for delays. Sometimes things come up in the title search that are unexpected and may cause the deal to be delayed. Be sure to purchase title insurance if it is not provided and always have the title search done as early as possible to avoid last minute surprises. After you close don’t forget to make new keys. Anyone and everyone could have a copy of the key that was in the box. Be sure to change all of your locks and have keys made so you don’t get unexpected visitors.
Last but not least, purchase a home warranty. This will protect you from problems that may pop up the first year. These warranties cover a wide range of items from the range to the heat pump so it would be wise to be sure that you are covered. Have a comment or questions? We want to hear from you!