Foreclosure is also called “Bank Owned” or “REO”
What is the foreclosure process?
“In foreclosure” means that the bank has notified the owner of the home that they are in default on the mortgage and the monthly payment is overdue. If owner does not pay up, the home will become a foreclosure property.
The Home owner will continue to get notices until there is a “foreclosure sale” by the courthouse (commonly called “sale date”).
It is rare that an investor will buy the house and more typically the foreclosure property is bought back by bank that holds the mortgage and the bank now becomes the new owner.
The time lapse from the first notice until the house is repossessed by the bank (in Florida) in a foreclosure sale can take several years. Currently the foreclosure process in Florida takes almost 3 years. So when a potential home buyer sees the delinquency list on sites like Trulia or Zillow, it is not time to get excited, as the property is not ready to buy and may not be for many years.
When the bank re-possesses the foreclosure property it will then be placed on the market as a foreclosure to sell with a real estate agent as an ACTIVE listing in MLS. It will not be for sale by Trulia or Zillow, it will be listed with an REO agent in a regular real estate office. Buyers Broker of Florida can show and sell all foreclosed properties.
Banks are not in the habit of selling direct to consumers.
Here are some facts about foreclosure property in Central Florida:
- More than likely a foreclosure property will be in some stage of distressed condition.
- More than likely a foreclosure property will draw multiple offers.
- More than likely a foreclosure property will sell for close to full price or more than full price.
When the Bank sells a foreclosure, they typically like to have:
- Cash offers
- Few or no contingencies
- “As is” contracts, with no repairs
- Buyer not asking for closing costs
- Quick 30-day closings
Foreclosure home negotiations vary
Bank negotiations are all different. It depends upon the bank, the specific property, price, location, condition and how reasonable the asset manager is. The bank does not need to review offers in the order received and the bank can choose to negotiate any offer, or no offers, or all offers at the same time. They can even accept a lower offer than your offer. There are no rules for the bank, so they can do whatever they want.
Once your offer is accepted, you will receive a supplemental bank addendum that protects ONLY the bank with addendum terms that may vary and dilute any protection that you may have had in your original offer.
As your personal Exclusive Buyers Agent, we will make a diligent effort to negotiate the lowest price and most favorable terms possible. We work only for you and not the bank.
For detailed information on Foreclosures please go to page 20 of our Home Buyers Guide.