Bank owned properties can be a great deal and bargain for your client but keep in mind that the best thing you can do for your client is getting them a credit for a lot of their closing costs. And you ask WHY? Pay close attention to those 17 page counter offers from the bank.
The Bank (Seller) most likely will not pay for any repairs.- The Bank most likely will not pay for association or condo association docs (And VA loans NEED certain documents so your client will end up paying for the documents)
- The Bank most likely will not pay for the Termite Inspection (And some lenders require a report)
- The Bank most likely will not pay for a survey (And some lenders require a report)
- The Bank most likely do not have all the keys for the home/unit (And your client will most likely pay for the mailbox key, pool key etc.)
- The Bank most likely will only pay "up to" a certain amount for commission to the Realtor® representing the Buyer.
- The Bank most likely will charge $100 per day for every day past the closing date deadline (after they have countered your closing date with a date two weeks earlier)
Also, you really want to make sure that the home/unit is in pretty good shape so that your client will not be making up that difference in 'great price' with a bunch of repairs as well. Make sure you get a Professional Home Inspection so you will have a detailed report on any items that you may need to remedy or repair.
So asking for a decent amount of credit to apply towards the buyers closing costs can be beneficial when it comes to:
Paying for those Association Documents (that can run up to $700 for both Association and Condominium Association Documents.) Remember, on a VA loan the lender needs the Budget, Minutes, RR105C and the Insurance Summary)- Paying for the Termite Inspection because you really want to be sure you aren't facing a colony of ground termites
- Paying for those keys/garagae door openers and any other items associated with the home or recreation areas.
- Paying for the survey Especially in an older neighborhood where neighbors John and Bob agreed to just putting up a wall not knowing where the boundary lines were.
- Paying for a home warranty for things that may crop up later. And THAT is a good idea as it may save loads on any issues arising later on. You pay just a service fee for electrical, plumbing, appliances etc. If it breaks they may just replace the whole unit.
How did I learn all this?
I closed my first bank owned property transaction yesterday.
There are just some things we do (or pay for) to make it happen for our clients.
And they acquire that golden egg!
© 2008 Celeste "Sally" Cheeseman, All rights reserved
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Celeste "Sally" Cheeseman is a Realtor-Associate® and Certified Residential Specialist (CRS) with Century 21 Liberty Homes in Mililani, Hawaii. With a sharp understanding that a listening ear is the key to a client's needs she serves the island of Oahu (Honolulu County) and all Hawaii Military Relocations, Hawaii Retirees, Hawaii Job Transfers and Hawaii Residents, Home Buyers and Sellers.
© 2007-2012 Celeste "Sally" Cheeseman's Hawaii Real Estate and Relocation Blog.
All rights reserved.
