Kim Thompson, Broker
Windermere Real Estate

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Tuesday, March 29, 2011

Bellingham Bank owned property

I'd like to talk about Bellingham bank owned property today.

Bank owned property is also called Real estate owned, REO, or foreclosure and  it is a kind of property owned by a lender usually a bank, Freddie Mac or Fannie Mae after foreclosure process.

People have the perception that bellingham bank owned properties are always a good deal. It often times is true but not always, so make sure to have a real estate professionals run comps as usual. One thing that is different about purchasing a bank owned property though is that bank doesn't have emotions about the property and they can let go of it more easily at a lower price but it needs to make sense in numbers following their rules. One rule seems to be that bank would not negotiating much right after they reduce the price. I had a client made an offer on a condo for $93,000 cash one day after bank lowered the price to $99,000. Bank rejected it then lowered the price to $89,000 just a couple of weeks later.

Another rule is to sell it 'AS-IS' and it sounds scarier than it is. What it means is that bank doesn't want to do any repairs on the house. Often times going through foreclosure means 'distressed' property and Bank never lived in the property and in fact they might be thousands miles away from the property. That's why more than ever you need a qualified inspector who can throughly find all the defects of the house. Make sure to write the contract with inspection contingency to give you an exit without sacrificing your earnest money if you don't like what you find through inspection. Since bank doesn't often negotiate the price you need to take it into account when you make an offer too.

In a multiple offer situation, bank likes to ask all the offerers to submit their 'highest and best' offer rather than countering one by one. They might prefer cash offer even if it is a lower offer. How to make your offer more attractive to the bank is for another post.

In Bellingham, we don't have as many bank owned properties as other part of the country but there are some deals to have for sure. But make sure you do your due diligence and hire a real estate agent you can trust.

Please contact me if you'd like a list of Bellingham Bank owned properties.


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