Insider Tips for Buying Orange County Bank Owned Real Estate

by leslie on September 23, 2008

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What Every Buyer Must Know About Buying Bank Owned Homes in Orange County

The fastest moving of the three Real Estate markets in Orange County today is the Bank Owned or REO market. More than half of the South Orange County Bank Owned homes are currently selling within the first 5 days on the market. Everyone in today’s Real Estate wants a great deal, and this is the best place to find just such a deal right now. But Caveat Emptor (buyer beware) are very much the watch words for these homes.

4 Must Have’s for Buying a Home in the REO Market in Orange County

1. You must get pre-qualified through the Bank who owns the property.

Regardless of whether you have a preferred lender and whether or not you are already pre-qualified, the bank owning the property will naturally want the first shot at your business. This may or may not effect your FICO score – depending on how many other lenders have already run your credit. Typically, you can do this online or by calling a specified bank loan representative – your Realtor will give you the details. But you must act fast on this requirement when you find a great deal on a Bank Owned home, since it will be required before the bank will even look at your offer. And despite all the things your Realtor can do for you, this one is, and should be, the responsibility of the buyer – particularliy due to the rampant growth of Identity Theft, you want to protect your personal financial information whenever and however possible.

2. You must have proof of funds for your down payment

The banks want to know you are capable of buying the home and will require proof. This is best done by having your most recent bank statement or savings account statement. Please always mask your account information, SSN, and other personal information – just make sure you name is visible. Remember the caution about Identity Theft.

3. You must submit a check for the initial deposit – sometimes as much as 3% of the list price.

There are more and more homes where a 3% deposit is required, sometimes as much as 10% if you are paying with cash. The bank want to make sure you are serious and uses this as an upfront screening technique. The funds must be available on the date you write the check, however, you may elect to use a differnent account a the point you must submit the check to escrow.

4. A full executed Purchase Agreement – including the banks’ required disclosures.

You must take the time required to sign all the paperwork included in the Purchase Agreement, including Addendums, Disclosures, and bank required disclosures. If there is more than one buyer, both have to sign all required contracts and disclosures. Again, this is a pre-screening process by the bank, since things will move very quickly once your offer is accepted.

That’s it. It may take some time to get all of this pulled together, but it is required to be a competitive buyer in today’s Orange County Bank Owned Real Estate market – the fastest moving of the three current Orange County Real Estate markets.