Purchasing Foreclosures and Bank-Owned Properties:
We have been asked by clients "how is purchasing a foreclosure or bank-owned home or
property different from other real estate transactions?" The shortest answer is- when making
an offer on a foreclosed or bank-owned property, or even a property involved in a
bankruptcy, you must submit documents with your offer that show you have the financial
ability to purchase the property. The documents are usually a Pre-Qualification Letter from a
bank or mortgage company showing that you are pre-approved for a mortgage up to a
specified amount. In the case of a cash offer on the property, you would need a letter from
your bank showing that you have liquid funds in the amount of the offer.
When submitting an offer on a property owned by a quasi-government-owned financial
institution, such as Fannie Mae, specific addendums are usually required to accompany your
offer. Fannie Mae has a 13 page "Real Estate Purchase Addendum" that must be completed
and accompany your offer, with your pre-qualification letter, or proof-of-funds letter as
explained above. Also Fannie Mae requires a copy of your earnest money deposit check, and
lists some changes that must be made to the standard "Offer To Purchase And Contract"
form in North Carolina. If these forms and addendums are not properly completed and
submitted, your offer will not be considered.
After properly submitting an offer, addendums, pre-qualification letter, proof-of-funds, and
copy of your earnest money deposit check, a negotiation takes place very similar to a
standard real estate offer. You have made your offer, the bank can accept your offer, or
present a counter-offer. If you receive a counter-offer, you may elect to decline, accept, or
present a counter-offer to the counter-offer. This process can sometimes go back and forth
for days, until price and terms are reached that are agreeable to both sides. In most
completed transactions, both sides compromise somewhat. Your paid a bit more that you
would have liked, and the bank got a bit less than they would have liked.
We believe that the current real estate market presents one of the best buying opportunities
that we have seen in our lifetimes. A buyer has many homes from which to choose, and
some exceptional opportunities to purchase foreclosed or bank-owned properties at a
substantial discount from what other properties in the area may be priced.
We keep our own list of foreclosed, or bank-owned properties. Many websites that list
foreclosed properties require you to join, or pay a membership fee to have access to their
information, and then the information is sometimes dated, or just plain wrong. We will be
happy to send you a copy of our list, just send us your email address. By the way, we do not
sell email addresses to anyone, so your request will not result in a flood of junk emails. So, if
you're thinking about buying a foreclosure, either for a primary home, vacation home, or for
investment purposes, let us hear from you.
Your Mountain Dreams Team
If you have any questions or would like more
information, please call us at 877-296-0400 or
email us, or use our
online request form.