Three tips when buying a bank-owned property

If you are buying a foreclosure, remember that a bank’s
asset manager is usually someone who has no knowledge of
the property’s history and is in no position to give
assurances about the property’s condition.

The bank’s primary goal is to make as few
representations as possible and to be completely done with
the property once it’s closed. That means no lingering
responsibility for repairs, no tax assistance, and no live
body to show you the legal corners of the property or the
water shut-off valve.

Buyers need to be thorough in addressing issues prior
to closing because they lose their right to object to any
property defects once the deal is done.

Three quick tips when buying a property from a bank’s
REO (real estate owned) portfolio:

• First move – Check the title. Request
  a clean preliminary title report early enough to give you
  time to react to problems before closing. Purchase an
  owner’s title insurance policy if it’s not provided.
• Make new keys. The lock box key is
  likely to be the only one and there’s no telling how many
  people have a copy. Make new keys after closing and re-
  program electric entries, such as the garage door.
• Consider a home warranty. The bank
  has limited responsibility. Protect yourself by
  negotiating the cost of a one-year policy before you
  close.

REOs provide a great opportunity for buyers, but the
process can be frustrating. Be ready and realistic.