It is very important that your Realtor knows the vast difference between a REO, a bank owned property, and a normal listing. If your Realtor isn’t aware of the differences between the two, you could end up losing your money, or worse yet, the property you desired to purchase. Let me explain how this could happen.

Banks hold all the cards in a bank owned transaction. They don’t have disclosure requirements and set all the rules. They usually make the buyer sign an addendum that basically takes away most of the buyers protections and puts the ball squarely in the banks court.

The bank will set a timeline that they demand you stay on top of, or they will enforce consequences on you. The odd thing is that they can take all the time they need before they deliver any type of response to you. Almost a month ago, I was approved and have been holding money in escrow for a bank owned property. It took the bank three weeks into the thirty-day period before they even opened my escrow.

We didn’t even receive a copy of the contract or addendum until we were already three weeks in. It just so happens that the addendum we had signed way back at the beginning of the process had a clause that we pay $100 per day per diem for every day that went past the first thirty days.

They didn’t help us in anyway to meet our deadlines either. As you may already be aware, most short sales do not have a successful closing. Typically this happens because the listing agent that takes on the contract isn’t familiar with how a short sale works, but still takes the home anyway. In the same breath, REO’s can also turn out the same. In my case, the listing agent was very confident that he had all of his ducks in a row, and the bank was ready to close.

Submitted by: B. Stein has much experience shopping new homes for sale plus properties overall. Check out his other posts online.

Related posts:

1. Handle REO’s On Time
2. Save Your Money With A Bank Owned Property
3. Short Sales Don’t Always Stick
4. Avoid Short Sales
5. Realty Micromanagement
6. Short Patience With Short Sales
7. Save Money With A Bank Owned Property
8. Don’t Spend A Bundle When You Buy A Bank Owned Property
9. Spend Less When You Buy A Bank Owned Property
10. Keep Your A Bundle When You Buy A Bank Owned Property