Bank Owned/Corporate Owned properties are different from “traditional” transactions. Please review the following information which may help answer some questions you may have.
1) REQUIRED W/OFFER: A pre-approval letter is required with all financed offers. The lender’s contact’s name, email address, and phone number are all REQUIRED. ( this included private funding sources ) The amount on the pre-approval must cover the purchase offer price. An updated letter will be required if the negotiations increase above the pre-approval amount. Please refer to Agent Remarks if it is a Bank Owned property. In the event the pre-approval amount does not cover the offer price, a proof of funds letter/statement will be required showing the difference. If your client will not be living in the property themselves (or they will be using this as a second home), they will be an INVESTOR for the banks purposes. We need to know that at the time of offer submittal. Cash buyers MAY need to provide two months bank statements to show they have the Cash funds to purchase. Funds must be in a US BANK IN US DOLLARS
2) OFFERS BY INVESTMENT COMPANIES: Articles of Incorporation are required on all offers submitted in a company’s name. Articles must grant Authorized signature permission.
3) CASH OFFERS: Cash transactions are subject to special deed restrictions as follows:
The Grantee(s), or purchaser(s), of the Property may not re-sell, record an additional conveyance document, or otherwise transfer title to the Property within 60 days following the Grantor’s execution of this Deed.
4) EARNEST MONEY: A copy of an Earnest Money check is required WITH the offer. In most cases a 1% EMD will be the MINIMUM accepted. The earnest money check made payable to the buyer’s/seller’s attorney (as instructed in agent only comments) DO NOT MAKE CHECK PAYABLE TO THE LISTING FIRM!. If you do not know yet who will be used, please leave the check blank and write ‘Attorney’ on the Offer to Purchase and Contract. Cash Purchases may be required to put 5% to 10% of the purchase price down as a non-refundable EMD of the offer
5) VA OWNED PROPERTY: The VA will generate their own forms once they have accepted an offer, these forms will be used in place of the NC Offer to Purchase and Contract. To submit an offer, please use the NC Offer to Purchase.
6) SELLER: Please identify the seller as: ‘Owner of Record’, “Corporate Owned” or as stated on the MLS.
7) DUE DILIGENCE / INSPECTION PERIOD: Sellers will typically allow somewhere between a 7 – 14 day inspection period for financed offers, up to 5 days for cash offers. No Due Diligence period as per new NC Contract applies, inspection period only.
8) CLOSING DATE: Please do not ask for a closing date within the last 5 business days of the month. TIME IS OF THE ESSENCE. Seller may elect to cancel the contract and retain buyers earnest money if the contract fails to close by the agreed upon closing date. Any and all extension requests must be submitted at least 1 week prior to contract close date in order to be considered. Additional earnest money may also be required.
*Cash Deals: Most Bank Owned properties please provide a closing date approx. 20-30 days out. Freddie Mac Properties please provide a closing date approx. 15 days out.
9) AUTOMATIC REJECTIONS: Contingent offers ( Subject to ) and offers requesting Assignees.
10) AS-IS: All REO sales are “AS-IS.” Sellers to make no additional repairs. Sellers have not performed inspections. Sellers have not performed a survey.
11) DISCLOSURES: Sellers have never lived in the property, Foreclosures are EXEMPT from the Residential Property Disclosure form.
12) OFFER SUBMITTAL: A typical response time from a seller is 2-5 days, this time may vary. The sellers may be quick one day and not another, it depends on their inventory load. Some asset managers work with as many as 500 assets at a time. Sellers do not work on weekends. Any offer that comes in late on Friday will not be submitted until Monday. Complete offers are submitted within 24 business hours of their receipt Monday thru Friday 9am to 5pm EST.
13) SELLER ADDENDUMS: Many sellers will generate their addendums once an offer has been accepted. It may take a day or two for these to be generated. Sometimes longer if they have to submit the offer for further approval. The addendums will be sent to the buyers agent for their buyers signatures and we will need them returned to us within 24 hrs. They then will be sent to the seller for signature. It may take a day or two for the seller to return the executed contract. Once the seller sends the executed contract, they will no longer review any additional offers which may come in. The property is NOW under contract. These contracts will not have “original” seller signatures.
14) MULTIPLE OFFERS: Typically once the seller has multiple offers they will request everyone’s Highest & Best offer and generate a form to be signed by the buyers and their agents stating this has occurred and is understood. THIS IS NOT ALWAYS THE CASE. Sellers can choose to accept any offer at any time up to contract execution for ANY REASON.
15) UTILITIES FOR INSPECTIONS: Power and water should already be connected in most cases. Water will be left off at the main shut off valve to the property or at the street if the property does not have a main shut off or it is failing. In the event the property has been winterized, it is considered part of the buyer’s inspection procedure to arrange and pay to have the property de-winterized before the inspection and re-winterized after the inspection. It is required that the buyer use our preferred contractor for de-winterization and re-winterization. Please contact us for the contractor’s contact information. If the property has natural gas, you will need to notify us of your inspection date no less than 3 business days prior so arrangements can be made to have the gas connected if necessary. The gas company will not connect the gas if the water is not turned on and the property de-winterized. In the event this property has LP gas, we will not be able to provide any LP for an inspection. Most LP companies require the accounts to be in the new owner’s name only and have a large minimum amount required to be put in the tank.
In an effort to prevent your buyer from incurring additional charges, we strongly recommend you verify all utilities are active prior to the inspection. Neither the listing broker nor the seller will be responsible for paying any additional charges by inspectors in the event the utilities are not connected by the inspection.
**PLEASE MAKE SURE YOUR HOME INSPECTOR TURNS THE WATER BACK OFF AT THE MAIN WHEN INSPECTIONS ARE COMPLETE AND THIS INFORMATION IS CONVEYED TO THE APPRAISER**.
16) UTILITIES AT CLOSE: Utilities will be disconnected/removed from our name the day of CONTRACT CLOSE DATE. Please make sure your buyer calls a couple of days ahead of closing to set up service in their name to not have an interruption of service. In the event of a buyer delay in closing, the buyer will be responsible for the utilities from contract close date forward.
17) CLOSING: Most sellers require 48-72 hrs to review a HUD for approval. Any delays caused by the buyers attorney submitting a INCORRECT HUD (including lender delays) for seller signature in order to record on the contract close date could result in buyer paying PER DIEM penalties (including weekend days) as stated in the sellers addendum (usually $50 or more per day).
18) COMMISSIONS: Most commissions are based on selling price. Some commissions are based on net sales price. The net sales price is defined as the selling price minus any concessions such as closing costs and home warranties paid for by the seller.
Always contact your Real Estate attorney to verify information. Information provided is subject to change at any time.
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