Tucson Real Estate Blogs » Bank Repossessed Properties, Are They a Good Deal?

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Douglas Trudeau , Assoc. Broker
Prudential Foothills Real Estate
64 N. Harrison Road, Suite 160
Tucson , AZ 85748
Mobile: 520-954-2209
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Bank Repossessed Properties, Are They a Good Deal?

It’s no wonder that some bank repossessed properties are hard to sell. Lenders whose future are in question and who need to get rid of the inventory of homes they possess should take note. Guaranteed, the chance of buying some bank owned properties for much less money than their value can be high. So is the risk. Read the contract thoroughly. The bank has a lot of clauses that can be very one sided. Having an attorney read the contract can save a lot of headaches.

In Arizona a buyer makes and offer, signs it and it’s proposed to the Seller. If the Seller counters, they prepare it, sign it, and propose it to the Buyer. Not with Banks. They want the Buyer to sign the Counter Offer first. Hmmm?

Clauses like, “Seller’s acceptance of this offer is evidenced by Seller’s signature herein…” Sounds reasonable. You would expect a statement like this. Read further, “…and no prior oral discussion or representations if any by Seller or its agents, shall be binding against Seller unless set forth in this Counterproposal.” The listing Agent tried to argue that this clause was binding to the Seller. Hmmm?

What is interesting is the sentences prior to this sentence. “Buyer acknowledges that Seller may have received offers prior to or may receive offers after receipt of this offer.” Understandable, the standard Arizona contracts allow the Seller to accept back up offers. Wait! The next sentence, “Buyer acknowledges that the Seller may consider all offers to purchase, regardless of the date of receipt and that Seller may accept or reject any offer in its sole discretion.” Anybody see the word “backup” in that statement? Can the Seller reject an offer after it was accepted? “…Seller may accept or reject any offer in its sole discretion.” Hmmm?

Buyer beware, how did the bank repossess the property? “Buyer acknowledges that Seller obtained the Property by foreclosure…” In Arizona, as in most states, a foreclosure wipes out all recorded liens on the property, with the exception of taxes. Again, an attorney can best advise. Wait! “…or a deed in lieu of foreclosure.” What about recorded liens? What are their status? Foreclosure wipes them out, not so with a deed in lieu. Attorney advise…

This is just a sample of a contract counter proposal generated by a Bank in attempt to sell a property. If you are looking at buying a bank repossessed property know that with high gain comes high risk. Do you due diligence with professional advise from an attorney.

If banks want to sell of their inventory of repossessed homes, they need to be more reasonable in their counter offers. Why should Buyers accept a contract that can be sold out from under them? Back up offers, yes. At sole discretion, no. Banks should have run a title search for any possible liens, that should be disclosed to the Buyers up front so they know what to expect. Banks should disclose everything they know about the property, just like every other Seller. Banks should be more reasonable.

Buyers, read every sentence. Get legal advise. There are some good deals out there. Don’ give up. It takes patience, time, due diligence, and the willingness to take risk at a level you are comfortable with.

This entry was posted on Saturday, December 8th, 2007 at 7:25 am and is filed under Tucson Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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