The Buying process when you buy an REO (Bank Owned Property)
Writing and presenting the offer The offer MUST be presented with a proof of funds
If “all cash deal” a bank or financial institution statement showing your ability to pay for the purchase is mandatory
If financing: needs an approval by the bank who owns the property whether financing with that bank or not.
The transaction process
Once the offer is accepted by the seller (the bank), we receive a contract established by the seller stating all the terms of the sale that the buyer needs to sign. The Seller will then countersign the contract when returned to them. The date of “acceptance of the offer” (beginning of escrow) will be the date of signature of seller.
Buyer has 3 days to transfer the EMD (Earnest Money Deposit) to escrow
The seller will deliver a “clean” title to the buyer at close of escrow
Buyer will have traditionally 7 to 10 days from the day of “acceptance” to have all inspections and due diligence completed.
Termite inspection is paid and ordered by the seller (escrow will not close until a “clear report” is delivered)
Traditionally the property is sold “AS IS” and no repairs are completed by the seller (this is why we strongly recommend having a home inspection paid by the buyer)
The CC&r’s (home owners association covenants and rules) generally take up to 7 days to be prepared and sent to the buyer(at the buyer’s cost – about $250) and this is the only contingency that is left beyond the 7 days (generally up 15 days) to enable the buyer to read and understand the documents.
At this time, the buyer still has the option of cancelling the transaction and receives his EMD (deposit) back.
Past that time, if you cancel you could lose your EMD
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