How to Make an Offer on a House Bank Foreclosure
Bank foreclosures are homes, owned by banks, that are typically priced less than competing homes in the same neighborhoods. Buying a bank foreclosure can be a great way to get a bargain on a house. Banks generally do not want to hold onto houses due to the expenses that come with home ownership. Repairs, utilities, taxes and association fees are just a few examples of extra expenses. This is a chance to get into a home that you couldn't afford if being offered by a standard homeowner.
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Instructions
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Obtain estimates for any repairs that need done on the home. This list of repairs will help you calculate an offer price and still pay for the necessary repairs. This list price will also serve as a bargaining tool between you and the bank when it comes to the final purchase price.
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Evaluate comparable sales in the area. You can do this by calling a licensed Realtor in the area, or by yourself with a little legwork. If you are doing this on your own, look for homes that have sold within the last six months of similar age, size, style and condition of the home you are looking to purchase. This will give you an idea of what homes are worth in the area.
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Write a purchase offer. Outline the price you are willing to pay for the home, as well as the terms of your offer. Terms can be the date you want to close the deal and if you are writing the offer subject to any inspections. The inspection clause will allow you to back out of the deal if a home inspector finds major issues with the home.
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Enclose an earnest money check with your offer. The more money you put down as earnest money, the more serious of a buyer you will appear to the bank. The earnest money you put down will be held in an escrow account until the day of closing, at which the money will be applied toward the home purchase price.
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Contact the bank to find out where to send the offer. Ask what their submission guidelines are, such as via facsimile, email or parcel post. It is best to follow their guidelines to ensure a speedy transaction.
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Tips & Warnings
Include comparable sales and a repair list with your purchase offer to defend the offer price if it is lower than the listing price. Be patient. Banks are not known for being quick when it comes to their foreclosures!
