Q: I found a house I want to buy in Morrell Park, but the listing says it is a “bank-owned property.” It’s not a great house, but it’s pretty cheap. I am pre-approved from my bank for the exact amount they are asking. Is there a special way to make an offer on this house? What do I need to do to buy it?
A: Your first step is to contact either the real estate agency that listed the property or a real estate agent you know and trust to show you the property and help you make the offer. It is always an important decision whether to contact the listing agent of any property or pick a buyer’s agent of your own.
For bank-owned properties (otherwise known as REOs), besides the standard paperwork and the agreement of sale, there may be several addendums and disclosures the bank (seller) will ask you to sign. For this reason alone, it is important to consider having someone working in your best interest as your buyer’s agent to explain these documents to you.
Since you are planning on getting a mortgage, and you say it’s not a great house, it is imperative you make sure the condition of the home will be acceptable to your lender. Sometimes REOs aren’t in livable condition and your mortgage lender may require repairs to get the loan but the bank (seller) won’t do them. If you see there are major repairs that need to be made — such as a missing heater — put those requests right into the agreement of sale so everyone is on the same page. If the offer gets accepted, and the bank (seller) is willing to do the repairs, you can feel secure your lender will be able to close your home loan.
Stacey McCarthy is a real estate agent with the McCarthy Group of Keller Williams. Her Real NEastate column appears every Wednesday on NEastPhilly.com. See others here. Read other NEast Philly columns here.