Ok, Another ? About A Bank REO...(m)
How likely is it that a bank will do fix ups on a property to bring it to fmv? I've never heard of this before. I thought bank were in business to make money not lose maybe more money.
The reason I ask is because the realtor I'm trying to get this property through said that the bank came in and put in new carpet and painted and stuff like that to bring it up to fmv and thats why they may not take too much less than their asking price.
For some reason I feel she is lying to me, I may be wrong thats why I'm bring it to you guys.
Should I take my business elsewhere is this actually a possibility?
Thanks again
quinn
Some banks are now renovating/rehabbing their REO's. They have found that by doing this the property is much more profitable. The decrease in holding time and the improved marketability are also positive fallouts of the bank doing the repairs.
Banks are trying to maximize their profits on REO's because of pressure from stockholders and the Federal Reserve.
Back in the early 90's banks would contract out with different real-estate agents thru-out the country to sell off their REO's. Then in the late 90's the
banks started to catch on and decided to start rehabbing properties themselves.
Now these banks are contracting with
real-estate agents to not only sell the properties, but hire a reputable company to rehab the properties as well.
To answer your question, it is not abnormal for banks to rehab their properties now. If you look at the property and it is rehabbed already I would advise you to throw in an offer anyways. I once bought a completely rehabbed property for 65% of market value. The bank had the property in their inventory for almost a year and wanted to unload it.
Best Riches,
Jeffrey Adam
[addsig]
We bought a REO back in February, had been vandalized, a front window broken out, back slider the outside pane of glass shattered, walls spray painted, carpet had paint dumped all over, glass in shower enclosure busted out, all light fixtures/bulbs broken, thermostat smashed, etc.
We put a bid in, all cash, no contingencies, and won over about a half dozen higher bids. Made what for us was a fair offer based on the condition of the property and what we would have to do to bring it to rentable condition. Well settlement day comes, we ride by the property prior to settlement to make sure the house is still standing (and nothing further had occurred), only to find a truck there and two guys inside. We were thinking to ourselves what the heck is going on??? We approached them to ask what was up, they showed us paperwork from the bank that owned the property, to replace the front window and the shower doors (why not the other items, I have no clue). Apparently they had been contracted by the bank months prior to fix these items and had never done it, and wanted to get paid. They took pictures of the completed work and drove off into the sunset. When we got to settlement we questioned our agent about it, he said it's not uncommon for the bank to have some things fixed prior to selling, but obviously these guys had waited till the last possible minute to follow thru. So we got a new front window and new shower doors for nothing. They certainly didnt bring the property up to FMV, but did do something constructive to the property. :-D