Buying a foreclosed (REO) Las Vegas home or condo is well worth the hassle, only the smart and strong win, conclusion | Las Vegas, Nevada Real Estate Agent, Las Vegas Homes, Condos, Land, Commercial Real Estate and Personal Blog

Buying a foreclosed (REO) Las Vegas home or condo is well worth the hassle, only the smart and strong win conclusion

September 28th, 2008 · No Comments

Buying a Las Vegas foreclosed home or condominium is well worth the hassle, don’t lose patience part one

Buying a foreclosed (REO) Las Vegas home or condo is well worth the hassle, only the smart and strong win part two

Buying a foreclosed (REO) Las Vegas home or condo is well worth the hassle, only the smart and strong win part three

Now we have gotten to the point that your offer is on a REO employee’s desk, now what? Depending on the REO (foreclosure) or loss prevention department that has gotten your offer you may get:

A rejection of your offer. The listing agent is required to provide one in writing.
A multiple offer form that asks the buyer to submit their best and highest offer. This form is submitted automatically if the bank requires it. Getting a multiple offer form from the bank doesn’t necessarily mean that there are multiple offers on the buyer’s desired condominium or home, there may be no other offers other than yours. However the buyer or buyer’s agent (Realtor) has no way of verifying this or how much other competing offers have been written for; if any. I usually ask our clients to submit their best and highest offer the first time and not raise their offer upon receipt of the multiple offer form. More popular listings are easy to find as there will be many business cards from other Las Vegas Realtors.
Acceptance of your offer that is contingent on a counter offer or bank addendum. Some of these are radical examples of contracts that are solely written to protect the seller’s interest rather than the buyer’s and they over-write almost the entire contract. However your agent should guide you through this process and closing of the escrow.
An outright acceptance of the buyer’s offer; which I have never seen.

In most cases the bank doesn’t sign the contract before the buyer has to open escrow and without the bank’s signature the buyer has no contract. I have not ever heard of any cases that the bank would back out of a contract after the escrow has been opened because they got a new higher offer.

Imagine that the buyer gets through the offer and counter phase and is the winning bidder and the escrow has been opened. At this point if we are representing you, we want an inspection of the property as soon as possible during the due diligence period so we can have time to react to any issues that are found in the inspection report. This is essential for several reasons:

A foreclosed property has to be purchased “as is” and the buyer has to sign a waiver of NRS 113 that waves the right for disclosures from the seller. Inspection by a licensed Nevada inspector is the remedy against the risk that is taken by buying a home or condo in Las Vegas “as is”.
There is the possibility that a defect could affect the appraisal and hence the buyer’s ability to finance his/her purchase on time and failure to detect such defects early could possibly delay obtaining a mortgage and needless complications.
An inspection of the home or condo insures against much bigger expenses that can occur when gone undetected. An inspection costs about 2-3 dollars per 1000 dollars of the purchase price.

But in order to conduct an inspection, utilities have to be turned on and often it is the REO listing agent that has to put the money up to get them turned on. While the GLVAR purchase contract calls for all of the utilities to be turned on within 2 days after acceptance by the seller, it is usually not possible. Even if the listing agent does his/her job and contacts the utility companies, they have a big back log and will turn utilities on when they get to it.

In a foreclosure transaction the escrow company is chosen by the seller and in some cases it takes a while for the transaction to be recorded after it is signed by both buyer and seller because the bank has to sign the HUD1 Form and return it to escrow.

Above was a summary description of the process of buying a foreclosed home or condo in Las Vegas from the bank. I have only discussed a small sample of what can go wrong throughout the process. Discussing all that can go wrong in a foreclosure real estate transaction requires a book.

The series of articles about buying a Las Vegas foreclosed condominium or house was not meant to scare you from buying them; just the opposite. If you want to buy a Las Vegas condo or home, there is an 80% chance that you will buy a foreclosure as the latest statistics show that 80% of Las Vegas condos and homes that have been purchased in Las Vegas are foreclosures.

In order to be a successful foreclosure real estate buyer, be patient, strong, smart and follow our instructions. Believe me the end justifies the effort.