Now is a great time to buy, and many buyers who are looking for the best deals around think bank-owned properties (Foreclosures/REO's) will give them the best bang for their buck.  While there are some good deals out there, you need to know what you're getting into.  I recently represented buyers of a bank owned townhouse in Jupiter and the whole experience was one we'd like to forget. 

When you make an offer on a bank owned property, you should make sure your realtor does some research first.  On this property, the buyers wanted to get their contract in fast, so as to beat everyone else to the punch.  That was fine, and we got the bank to accept the offer.  But all banks use their own addendum to the contract that the buyers have to sign, and it's all written in favor of the bank.

First of all, with so many foreclosure in Florida, some banks are putting properties on the market before the Certificate of Title (CT) is recorded in the public records.  With so many foreclosures these days, this can take 3 or 4 months.  If the CT is not recorded, you can't close.  This was the case with our attempted purchase of a bank owned property and it resulted in the deal falling through, among other reasons.

My buyers were using FHA financing which requires the property to meet certain standards.  This particular unit had wood rot on the fascia boards in the back.  My clients said they would pay to have it fixed, so as to speed up the loan approval process. One problem - there was a colony of Africanized honey bees a few feet away...we would have to get rid of the bees before the wood rot could be fixed.  Since the bank was totally unresponsive to getting this problem fixed, in the interest of time, I said I would pay up front to get the bees removed.  A bee removal professional killed an estimate 70,000 bees and removed about 200 lbs of honey and honeycomb from inside the walls of the townhouse, to the tune of $500. The buyer then paid to get the wood rot fixed, and also had paid for the inspection and appraisal...about $1000 total.

Well, after a lot of research, I discovered that the Certificate of Title had an error on it and probably wouldn't be recorded for a long time, so we couldn't close on the property.  With the long delay and the bee issue, the buyers decided to cancel the contract.  The bank's representatives were unresponsive during this whole ordeal and we all learned a valuable and pretty costly lesson.   

_{Point2 SEO Search Engine Optimization Services by Effective Realty Sites                   Parksville Real Estate Services, British Columbia Canada}