Bank owned properties are a challenge. Yes, the prices can be a screaming deal, but there are lots of hoops to jump through. If you have the stomach for it, I say go for it! Get your ducks in a row first, then jump in.
Right now, Promontory Ranch Club, a high end golf community in
Park City, Utah has some great deals. The development went through a bankruptcy a while back and the community is still on the rebound. Homes that previously went in the $2 million plus range can now be picked up for just under 1Million. Gorgeous homes, great community, great amenities. The theory is once the economy changes and the market has recovered, these homes will be worth a heck of alot more than the buyers have paid. In the mean time, these buyers of the bank owned bargains will live in a gorgeous, high end home for half the price. Promontory is about 10 minutes from Park City Mountain, Deer Valley and The Canyons. These homes have some of the most fabulous views of all 3 resorts.
So, you write an offer and think long and hard about the price, the closing date and the rest of the terms that work for you and your situation. Usually the seller will respond and the negotiations begin. Bank owned properties are different. The bank required my seller to sign an addendum they create as a blanket document to cover all possibilities in all areas of the country. Seriously, why don't they just write their own contract? They completely blow out of the water all of your dates on the original offer - due diligence deadline, financing deadline etc. In this particular addendum they gave the buyer 10 days to get an inspection and 15 to get loan approved. Inspection, not a problem, but even with a well qualified buyer, full loan approval in 15 days is difficult.
Back are the days where the banks require your first born child to approve a loan. Lending institutions give a borrower a "conditional approval" along with a list of additional documents they need to give full approval. No big deal, right? Wrong. In this particular case the list never ended. As soon as one required document was submitted, a request for something else would come. Luckily, this buyer was super organized and had all of the needed documents available. It almost felt like the underwriter was trying to justify their job!
Bank owned properties can be a great way to go if you know what to expect. Don't expect the offer and negotiation process to be like a regular home purchase. Meet with a loan officer and get everything ready to go on that front before you go shopping, then be ready to pre-qualify with their required lending institution. Next, go into the process with reasonable expectations about the price. Have your agent pull all the closed sales in that area. Banks aren't going to negotiate as much in an area with brisk sales. Figure they may not credit any money for repairs. Make sure you understand the bank addendum and the ramifications.
Call me at 435-731-0803 or email me at heather@parkcityhousehunters.com for more information about Promontory Ranch Club bank owned properties. Click on the link below to view some Promontory deals.
CLICK HERE TO VIEW PROMONTORY RANCH CLUB BARGAINS
