Now that the bank has possession of the property they have to act as a responsible owner and protect their asset. Remember as discussed on the New Hampshire foreclosure Law and Process page, nobody was willing to pay the minimum price to own the property at the auction. Most likely it was because there are some serious issues that have to be addressed before it will be saleable.

The bank will handle the eviction, if necessary, and may do some repairs. They will negotiate with the IRS for removal of tax liens (they will have a better chance of getting a reasonable settlement than you would). They will pay off or negotiate any other liens on the property to clear the title.,. As a purchaser of an REO property, the buyer will receive a title insurance policy and the opportunity to go on site and inspect the property.

Because the bank is doing all this work, and spending more money on the property, the idea that bank will dump it for pennies on the dollar is not likely. The big banks have entire departments to manage and sell their repossed real estate. Many times these departments will rely on local property management companies to go on site and deal with the issues like repairs needed to maintain the integrity like holes in the roof, or pest infestation Don't expect them to do any cosmetic repairs or updates to the property. In fact the inspection of the property management company or the banks own employees is NOT the same as an inspection by a certified home inspector.

When the bank sells the property it will be considered in "as is" condition. They have to disclose any problems that they are aware of, so the less they know the better. It is up to you to perform an inspection or pay for one from a professional.

The next step the bank will do after clearing the title an dealing with above issues, is to hire a real estate firm to market the property for and represent them in the process of selling it. The real estate agent will perform a CMA ( Current Market Analysis) to determine the listing price. This is the number that the bank will think is how much they can sell the property for. If the Real estate agency is not aware of any hidden issues,(remember no real detailed inspection has been done) the price may be high.

The smartest way to approach a bank owned property is to have a local real estate agent represent you. Why?

• Well consider this You may provide the listing agent confidential information such as salary, the maximum you spend for a home, your assets and credit history, and believe it will facilitate the approval process. But you may subsequently be shocked to learn that the agent to whom you have given this information actually represents the bank and, even more importantly, has an obligation to disclose this information to them.
• Also they hired a real estate agent to represent their interests and the interests of their stock holders, don't you deserve the same.

Yes the real estate agent has to disclose who they are working for. But they do not have to tell you what they will not do for you in the process, and they do have to compensate your agent from the commission portion of the sale.

If you choose to use one of our real estate agents here is what you can expect for service and normally at no additional cost to you.

We will promote and protect interest of you the buyer at all times.
We will know if the CMA is reflecting the current values in that neighborhood not the maximum they think they can get for it.
We will have a list of home inspectors who are looking out for you.
We will arrange property showings.
We will prepare a property value study.
We will explain the forms and agreement that will be used.
WE will Disclose all research about property history and liens.
We will Structure offer with the buyer's interest in mind.
We will Keep your financial capabilities/thoughts confidential unless authorized to disclose.
We will Negotiate best price and terms in your favor.
We will be there at the closing to advise you if any last minute issues come up.
and most importantly we will tell you when to walk away, and help you find a better deal elsewhere.

Now that we have covered how the process is done by the bank, we will discuss what will happen when you have found a property you are interested in. ( we will cover how to find the properties on a different page)

• First, we will schedule an appointment to see the property with you.
• After our visual inspection we will do our own CMA ( competitive Market Analysis) to get see where the if where the asking price compares with other properties currently for sale in that neighborhood.
• Next we will try to ascertain how much the bank has in the property and if there was any equity.
• Then we will determine if the bank has spent that equity on removing IRS leans or making repairs.

Now we are ready to make our first offer. We strongly recommend that the offer contain contingencies that will include a home inspection, that unfortunately will be a cost that you will have to pay,since the bank will not pay for it, and any other conditions that we discover in our preliminary investigation that may need to be addressed.

The offer process is not like making an offer on a property that is not an REO. Here is a typical way the process will happen.

If the bank has hired a listing agent to represent them that agent will most likely not be talking to them directly. Most banks require the offer to be faxed to them.

• We will present an offer on your behalf with the conditions we think need to be meet. the amount we offer will be below what we expect them to accept.
  • Almost all first offers are rejected because the bank needs to show their stockholders they have made the best effort to get the maximum price.
• The offer we make will not be reviewed by a single person and may take as long as 5 days to hear back. It will be rejected.
• The bank will send a counter offer.

If the offer is where we really wanted to be, than we proceed with inspections. If it is not we will go to phase two of the offer process.

• We make our counter-counter offer. either at the price we really wanted to buy it at or still lower, depending on the terms of their counter offer.
  • For example; they may have included some repairs in their offer. so our intended purchase price is good.

They will either accept at this point or counter again, and when we have an agreeable offer they will most likely add a clause that is "subject to corporate approval with in 5 days".

At this point we have a conditionally agree purchase price with an agreement that is reliant on our conditions. We order the home inspection and if all goes well you have bought a home at a great deal! If not, its back to the negotiation table.