AZ BUYER -- "AS IS" REO PROPERTY CONDITION PART IV

Property Condition

Banks always want to sell a property in "AS IS" condition. Most will provide a pest inspection but not unless you include it in your offer and insist upon it. They will allow you to all the inspections you want (at your expense) but generally do not agree to do any repairs unless required by the buyer's lender.
Your offer should include an inspection contingency period that allows you to terminate the sale if the inspections reveal unforeseen damages that the bank will not correct.
Even though you've agreed to “AS IS" always give the bank another chance to make repairs or give you a credit after you’ve completed your inspections.  Occasionally banks will re-negotiate to save the transaction instead of putting the property back on the market---just don’t count on it.
Most banks will not provide financing on their REOs but they may give a seller concession for the buyer's loan costs.  Many banks will also include a One-Year Home Warranty on the property but you have to ask for it in your purchase offer.

AZ BUYER--HOW BANKS SELL REO'S PART III

How Banks Sell REO's

Each bank/lender works a little differently but they all want to get the best price possible and have no interest in giving away the property. If the bank is very large they will have an entire department set up to manage their REO inventory.  After you make an offer to purchase, banks usually present a "counter-offer" and/or ask for your "highest & best" offer especially when there are several bidders on a property.   The Bank's counter may be at a higher price than you expect (especially the first week a REO is listed for sale) but they have to demonstrate to investors, shareholders and auditors that they attempted to get the highest price possible. You should plan to counter the counter-offer but when multiple offers exist you may not get the opportunity to make an additional counter offer.
Additionally, your offer will have to be reviewed and approved by several individuals and/or mortgage insurance companies.  Although an offer is accepted the bank may insert verbiage like “contingent upon corporate approval within 5 days" plus include there own "AS IS" addendum.

AZ Buyer---Bank Owns the Real Estate...Now What? Part II

REO Properties For Sale

The Bank now owns the property and the real estate loan no longer exists. The Bank will handle the eviction (if necessary) and may do some repairs. They will also negotiate with the IRS for removal of any tax liens which can take up to 6 months to achieve. If you buy a REO property, you will receive a Special Warranty Deed, Title insurance and the opportunity to inspect the property.
A bank owned property might not be a great bargain. Do your homework before making an offer. Compare the price that you will pay (if successful) to other home sales in the surrounding neighborhood.  Repair costs including time to complete them should also be considered plus factor in potential unknown issues. Avoid becoming involved in a ‘bidding war’ and paying over market value---very common in today's fast moving market.

What is a Foreclosure & REO (Real Estate Owned)? Part 1

A Foreclosure sale begins with a minimum bid that includes the loan balance, all accrued interest plus legal fees and any costs associated with the foreclosure process. In order to bid at a foreclosure auction, you must have a $10,000 cashier's check in your hand and the full amount of your bid is due within 24 hours after the sale has ended. As the successful bidder, you obtain the property in "as is" condition and that can include a tenant still occupying the property.  Recent legislation can prevent you from having the tenant removed and you may have to honor their lease with the previous owner so do your homework on this one before bidding.
In today's real estate arena the amount owed to the bank is almost always more than the value of the home resulting in very few successful foreclosure auction sales. Hence, the property "reverts" back to the bank and becomes an "REO" or "real estate owned" property. 

NEW Community-Owned or Privately Maintained Streets FNMA Requirements

In our ever-tightening environment appraisers are doing their research more carefully and lenders are finding that many streets thought to be publicly maintained are actually private roads.  This triggers an underwriting requirement to provide the recorded road maintenance agreement---which often does not exist.

If the property is not situated on a publicly dedicated and maintained street, then it must be situated on a street that is community owned and maintained or privately owned and maintained. There must be adequate vehicular access and there must be an adequate and legally enforceable agreement for vehicular access and maintenance.  

 

Community-Owned or Privately Maintained Streets

If the property is located on a community-owned or privately-owned and maintained street, an adequate, legally enforceable agreement or covenant for maintenance of the street is required. The agreement or covenant should include the following provisions and be recorded in the land records of the appropriate jurisdiction:

•	responsibility for payment of repairs, including each party’s representative share,

•	default remedies in the event a party to the agreement or covenant fails to comply with his or her obligations, and

•	The effective term of the agreement or covenant, which in most cases should be perpetual and binding on any future owners.

Note: If the property is located within a state that has statutory provisions that define the responsibilities of property owners for the maintenance and repair of a private street, no separate agreement or covenant is required.

If the property is not located in a state that imposes statutory requirements for maintenance, and either there is no agreement or covenant for maintenance of the street, or an agreement or covenant exists but does not meet the requirements listed above, the lender must indemnify Fannie Mae for any losses or expenses it may incur due to the physical condition of the street or in order to establish and/or retain access thereto.

HOUSING AFFORDABILITY CONTINUES TO CLIMB

Price declines and low interest rates continue to motivate buyers to enter the most affordable housing market in 28 years.  But, at the same time, only 1 in 10 of today's homeowners say they have delayed selling due to those same market conditions.  In the past year, the National Association of Realtor's Housing Affordability Index has increased 29% overall and 19% for first-time home buyers---the highest levels during the Index's 28 year history.

The survey also found that most Americans aren't aware of how affordable homes are becoming in today's fast-changing housing market.  More than 3/4's of consumers think a median-income family can afford less than half of the homes for sale in their area.  In reality, however, a family earning a median income of $53,182 can afford to buy nearly 75% of the current homes for sale.  For 14.6 percent of first-time home buyers, the government's $8,000 tax credit provides the impetus to shop for a home this year.

Courtesy of Sherri Buttler, Sun American Mortgage Company   sherri.buttler@SunAmerican.com 

HIDDEN HAZARDS IN YOUR HOME

The Most Painful Burn is the One you Could Have Prevented! 


Among the hidden hazards in your home, there are two especially harmful to children:  flammable liquids like gasoline and paint thinner.  The other is ordinary household tap water that's too hot for a child's skin.  Protecting your loved ones from flammable liquids and extremely hot water should come down to common sense.  However, with so many accidents, injuries and deaths every year it's easy to see that common sense is sometimes overlooked. 

As parents & grandparents, we become preoccupied or distracted in going about our daily lives and that's where the problems lie.  All it takes is a split second to change the course of your life and/or the life of a much-loved child.


Gasoline is a Motor fuel - that is the only thing gasoline is for.  It is not a solvent, not a cleaning fluid and should never be used that way.   Dangerous flammable vapors are released in your home or garage every time there is a spill or when the gasoline or other flammable liquid is not properly sealed in its storage container.  Silent, invisible vapors can travel; and, if these vapors reach a source of ignition, like a faulty electric outlet, the spark from a running motor or the pilot light of home appliance (hot water heater is a biggie), the vapors can ignite....and blow you clean out of the house.

Are These Products Around Your Home?  
GASOLINE, propane, kerosene, lighting liquids, cleaning liquids, oil-based paints, fertilizers, mineral spirits, nail polish remover, furniture polish, floor polish, disinfectants, pesticides, weed killers, turpentine, hair spray, adhesives and/or glues.