What You Should Know About Foreclosures
Written By: Miller and Associates Realty On: 14th October 2013 Under: Buyers, Economy, General, Listings, Market Updates, Real Estate Market, Real Estate News
As with the rest of the country, foreclosures have been and still are, prevalent in Panama City Beach. They are on everyone’s mind and in their property searches. When a property has been through the foreclosure process it is then owned by the bank that held the mortgage. Sometimes a property will be listed as an REO which stands for Real Estate Owned and means it is being sold by the bank.
I’ve had mixed experiences with foreclosures but the process has been very similar. To make an offer on a foreclosure the buyer will need to include a prequalification letter (if obtaining a mortgage) or proof of funds (if paying with cash). If a property is priced low and in a highly sought after location, there will be competition. Sometimes buyers think they are the only ones serious about making an offer and the bank will be glad to see it but every foreclosure sale I have submitted offers on has had multiple offers coming in. This leads to the bank waiting 1-3 days and asking all buyers to submit their highest and best offer. There is no way to know what anyone else is bidding so my advice to the buyer is to offer what they are comfortable with and won’t kick themselves if someone else gets it for $1000 more.
After an offer is accepted the bank will send a contract amendment to be signed as well as expect the earnest money deposit asap. The amendment often increases the earnest money deposit, reduces the number of days for inspection and sometimes shortens the closing date. This will feel high pressure to the buyer but it is the standard process. At this point the bank is a motivated seller and wants to make sure they have a motivated buyer.
After the buyer has an accepted offer, signed the addendum, made the deposit and had their inspections done, all they can do is wait for the title company to finalize the paperwork. This includes things like searching for any additional liens and verifying any home owner association dues etc… The most common theme I have experienced is that after jumping through so many hoops to satisfy the bank, their closing agent is unable to get the paperwork completed by the due date and then an extension has to be signed. Unless buyers are made aware that the deal probably won’t close within the 30 days the bank asked for, they start to get nervous or feel like they are wasting their time. The fact is the closing usually takes place in about 40 days vs. 30 but that is not guaranteed, if the property has a lot of liens it could take longer to get clean title and close. Foreclosures are often good deals but it is important to know the process. Written by: Allen Place
