Hubzu general questions

2 Replies

Hey BP,

I've been through about a year of BP education and feel like it's getting to be high time I pull the trigger on a real property. I'm in an area where it can be tough to make a property cash flow if it's purchased at market price, so I've been looking at Hubzu and for better deals. I just want to make sure that I'm not making any major mistakes on my first deal, so I thought I'd ask the experts!

1. I understand that when the property is labeled as "bank-owned," it indicates that the title is usually cleared of liens. If I buy title insurance, do I do this through the title company of my or the seller's choice once I've won the bid? 

2. One of the properties I'm looking at is described as "As-is without warranties." I understand that my sellers will allow you an inspection period during which you can check out the property fully. Is this standard, or do I have to negotiate that once I've won the bid? If I've already won the bid, aren't I contracted to buy the house anyway, so I wouldn't have any leverage to negotiate things like that? 

3. If I find something wrong with the property that is a deal-breaker, do I lose my earnest money and buyer's premium if I back out? Can I even back out?  

I know that these are pretty basic questions. I'd love any further advice that you could offer to help me avoid financial ruin on my first deal. So thankful for the education that this community has provided already!



@Lucas Amuchastegui

Every listing is different. The listings are designed by the seller with different instructions.

1. Bank-owned doesn't mean the title is clear. Sometimes the process wasn't done properly and you can still have a hangup with the title. That's why title searches and title insurance (if available) are important. Yes, you can use your own title company, but sometimes seller might offer a discount if you use theirs.

2. It depends. Not all homes are vacant. Occupied homes can't be inspected. Some vacant homes are available for inspection with limitations (no water/electricity). Depends on the instructions.

Traditional sales on hubzu might have an inspection contingency, others won't. So, when possible, you'd be better off inspecting or seeing the house with a contractor before bidding since you won't always have an inspection contingency.

If your bid is the winner, you can't simply reject your offer. However, your bid is not final until you go through the documentation process. But, if you just back out at random or don't return the documentation, you will lose your EMD.

3. You can't really back out most cases (except in the fault of the seller). If you do, you'll lose your EMD. For foreclosures and traditional sales, you have to go through the documentation process before your bid is final. You have 48 hours to sign the documents. If you fail to do so, the seller has the right to cancel your bid and go to backups or relist.

Side note, shortsales still need lender final approval.

Whatever type of sale it might be, you have to read the listing instructions carefully. Many are cash only. If that's the case, make sure you can meet the terms of the listing. If it's financing eligible, make sure you can get the financing in the required time limit.

@Christopher Phillips

Thank you so much for taking the time to write a thorough reply. That is very helpful. 

As a final question, do I need to have my own real estate agent represent me at any point during the transaction, or can I represent myself (not licensed) for the whole thing? 

Thanks again,