The Condo Mania Team
News > Scottsdale Bank Owned Condos -- What to Expect
published on 2014-01-29
Though bank-owned properties have been a real estate fixture just about since the start of real estate, they’ve become a reality in many areas of Phoenix and Scottsdale. However you feel about homeowners walking away from their homes in this strange real estate environment, you’ll have to admit that foreclosed homes are a draw to buyers. Bank owned properties are usually priced below others in the community, and the price keeps dropping until it sells.
Though bank-owned properties are less common in Scottsdale, the price drops in the last three years that have made Scottsdale more affordable will continue to drive some owners to foreclosure.
But here’s a caveat: not all bank-owned properties are priced as low as they should be, given their location, the number of foreclosures in the community, and the condition of the property. That’s where a knowledgeable real estate agent can help.
If you are interested in buying a bank-owned property (also known as an REO property – Real Estate Owned), there are a few rules of the game you’ll need to know. Though the rewards are potentially large, the banks have the upper hand in the purchase process.
Once your submit a purchase contract, the bank will ask you to sign an addendum, taking away some of your rights that are normally given to you as a buyer in the standard purchase contract, and also adding certain stipulations that put your earnest money at risk if you don’t complete a purchase. Though each lender addendum is different, here are some common stipulations you’ll find.
- The property will be offered "as is."
- Though you will still have an inspection period, the bank will most likely not fix anything in the property. Furthermore, after the inspection period, if anything goes wrong in the property, you are "stuck" with whatever problems the property acquires during the escrow period. Though banks are generally acting reasonably, if you find that the stove that was in the unit during inspections sprouts legs, or the rug obtains a new stain, you’re still expected to go through with the purchase.
- Many contracts will give you a certain amount of time to get your financing fully approved. If you can’t by the time period specified in the addendum, you may be in danger of losing your earnest deposit. If your financing delays the contract, you could be charged a daily penalty until you close.
We help our clients find the best bank-owned condos and townhomes for sale, that meet our criteria of best value, best communities and best locations within the communities. Interested in becoming a client? Contact us.
Though not guaranteed, information and statistics in this article have been acquired from sources believed to be reliable.
The Fair Housing Act prohibits discrimination in housing based on color, race, religion, national origin, sex, familial status, or disability.
Information Deemed Reliable But Not Guaranteed. The information being provided is for consumer's personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. This information, including square footage, while not guaranteed, has been acquired from sources believed to be reliable.
Last Updated: 2023-06-06 05:16:20