So you want to buy a bank owned home?
So you think you want to buy a bank owned home? There is noting wrong with this, in fact these are the best deals out there right now. But you MUST have a Realtor that understands what they are doing and a lot of agents (part time and some full time) are not used to dealing with banks. Your agent can make the difference between getting the home of your dreams and a costly major headache.
Most REO sellers require a special Addendum to the Purchase Contract. These addenda may contain many provisions that change the standard terms of the AAR Residential Resale Purchase Contract.
Some examples to be aware of:
• Changes in close of escrow date
• Alteration of the inspection period, response timeframes & cancellation provisions
• Alteration of Seller warranties
• Alteration of the financing provisions & removal of Unfulfilled Loan Contingency
• Monetary penalties for buyer’s failure to close on specified COE date (does not affect seller’s failure to close on time/delete) and request for extension of COE date.
• Limitations of seller’s liability
• Alters/removes mediation, arbitration and specific
• performance provisions
• May add automatic termination of contract upon breach
• Removes Cure Period
• May add specific monetary remedies upon breach/cancellation
• May add specific provisions for Seller unilateral cancellation
• Required timeframes for Seller review and approval of HUD-1 Settlement statement prior to close of escrow
• Seller to convey title by Special Warranty Deed
• May alter type of title insurance policy to be issued to buyer
• Limitations on Seller contributions to Buyer closing costs; including but not limited to HOA fees, title & escrow fees as per Arizona customary practice
Be sure to review the REO seller’s Addendum carefully with your buyer.
These are just a few of the items I’ve run across in the bank owned homes i helped my clients purchase. If you have any questions or would like to begin your search for that great deal out there, give me a call at 623.271.4234 or feel free to visit www.valleyREadvisor.com
