FAQ - Frequently Asked Questions
Bank owned homes are sold in “AS-IS” condition. This means that the bank will not make any repairs to the property. Unfortunately, we do not always know the history of the home, nor all repairs that may be needed that are not apparent to the eye. It is up to the buyer and buyer's agent to perform due diligence prior to writing the offer. Properties are priced with the knowledge of what repairs may be needed. If your buyer is doing an inspection/appraisal and repairs are required for loan approval, the buyer should get 2 bids for the work required and submit them to us. Under certain circumstances, the bank may increase the purchase price by the amount of the lowest bid, and repair the property for financing approval prior to close.
Typically responses come from a bank/seller within 48 hours. However, there are times when it can take up to 7 days. Banks typically work Monday thru Friday during business hours. Responses are not received on weekends.
No, banks use online systems and email to communicate rejections, counter offers, and offer acceptance. You will receive a response via email or the offer submission system used for that particular property. You will negotiate your transaction through email or the offer submission system. We communicate directly to the bank. Once an offer is verbally accepted, and final approval has been obtained, the bank will generate their own contract addenda and we will revise the purchase agreement based upon the terms that have been accepted. REMEMBER: According to the Statute of Frauds, nothing is a “done deal” until it has been fully executed in writing. If another offer comes in, we will submit it. The bank has the right to review or accept another offer if a contract has not been fully executed. This has happened on rare occasion. If you have obtain an accepted offer and receive contracts, it is wise to get those signed and returned to us as quickly as possible.
The bank addendum is the sales contract form specific to that bank. It restates the terms of the purchase and adds protection for the bank. The bank addendum supersedes the state purchase agreement. A "Per Diem" is a provision included in the sales contract, that if the property does not close by the contract end date (delay caused at no fault of the bank), the buyer will be charged daily, an amount spelled out in the addendum, until the property closes. Each bank has their own forms and the buyer and buyer's agent should carefully read each contract package to ensure they understand all of the terms.
Earnest money is an amount paid to the seller at the time of offer acceptance/execution, as "good faith" that you will complete the sales transaction as detailed in the sales contract. The amount of earnest money retained is negotiated and entered in the sales contract. Whatever amount that is agreed upon must be sent to our office within 2 banking days after offer acceptance. Earnest money MUST BE IN THE FORM OF CERTIFIED FUNDS (Cashier's check or Money order) . No exceptions. Earnest money is then held in trust and applied to the sale at closing.
Similar to retail real estate, you will need to submit a signed purchase agreement with your offer. In addition, most all banks require that an offer be sent with a pre-approval letter from the buyers lender (pre-approval must be dated within 30 days, state the buyer(s) name, state the amount that the buyer is qualified for, type of loan, and contact info for the lender) or proof of funds for a cash buyer. Some banks require a specific form stating whether the buyer is an investor or owner occupant. If such a form is required, it will be available as an attachment in the BLC.