Bank not listed as owner?

Question

I have no real estate background.  I am interested in purchasing a bank owned home, but I wondered why the courthouse does not list the bank as owner?  It still has the previous owner who failed to make mortgage payments as owner.  I know the bank "owns" the property now, but I don't see proof on paper.  Is this unusual?

Also, the property has a sign that simply says "Call with offers" and lists the bank's number.  What's the best way to approach verbal offers? Do you simply call and throw out a number?  Is it ever OK to email offers?  Can I back out if I do either of these things?

Eric M. · Answer

This is an unusual situation.  Most banks do not sell their REO themselves, they hire realtors to do it.  So you are just going to have to play this one by ear.  You can't really say the wrong thing.  Just call and ask questions.  Find out who is handling the sale.  Ask to view the insde of the property.  Just get as much info as possible.
Then calculate the price you want to pay and get your financing arranged and make the offer.  Doesn't matter what they are asking or what the loan amount was or who defaulted.
Just make the offer you want to pay and see what they say.  
It is very common for banks to be just as stubborn and unrealistic about price as regular sellers.  Even if they don't accept your offer, keep an eye on it and make another offer down the road.  Things change over time.

Craig Grella · Answer

If you're speaking to the owner or their rep over the phone don't try to talk about things you don't understand, you'll just come across as ignorant and no one will take you seriously.

If you are really worried about what to say, have a realtor do the talking for you, or split the deal with another investor. You can find one on this site or at a local REI club.

In the end, money talks, so no one will fault you for what you know or don't know.

The auction price is a meaningless number, your offer price needs to work with your investment parameters. If you need to make a certain return that will factor into your offer price.  Try not to worry about comps or auction prices, unless of course they are significantly lower that what you are offering.

Good luck.

Matt Kearney · Answer

Banks are very slow. It takes them a while to record their foreclosure deed after the auction.

Good Luck

Sydney Reece · Answer

Thank you for your quick reply!

If you don't mind another few questions...
What would you say over the phone?   I'm new at this, and I don't want to blow it by saying the wrong thing.

About a month ago I got their asking price, and it was too high (in my opinion) given that the property was auctioned and failed to close with multiple backup bidders bailing; not to mention it had sat on the market for a year before that.  Their asking price was $25K over the winning bid.

I'd like to offer less than the winning bid given repairs needed.  Is that crazy?  This is a local bank with only a few properties on their books.

Thanks for your help!

Craig Grella · Answer

Generally the courthouses wont have that kind of info. The courthouse is the place where the bank takes back the property by foreclosing on the property which was pledged as security for the bank's loan.

The ownership "proof" you are looking for would be under the tax records because as new owner, the bank will be responsible for making property tax payments.  To find that info, look for the local or county property tax assessor's office.

To confirm the correct owner you can check with a local title company, and if you do end up making a purchase make sure you get title insurance that will cover any defects in title that might arise from claims in ownership.

Jeffrey K. · Answer

The property recording often lags.

It is very strange that it has a sign that says call with offers.  I would call and ask for more info. Once you see the property and decided what you want to offer you should consult with a lawyer to help you draft an offer on your state's form.  You can use this form as a template in the future.  Make sure you have a GAP endorsement and an inspection period in your offer.

Bank not listed as owner?

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