Northern Virginia REO "Mythconceptions"

Unicorn2It never fails when you get a group of buyer’s together in Northern Virginia the talk turns to REO properties and the rumors that they have heard from their friends. From experience this year working with buyers on REO purchases I’ve encountered the following “mythconceptions.”

Banks will not turn on the utilities-FALSE
Very few banks refuse to turn on the utilities and most of the larger banks such as Countrywide and IndyMac have the utilities on. If they aren’t a call to the listing agent should take care of the problem. Don’t take no for an answer and if they continue ask them to show you the listing agreement where it says utilities will not be turned on.

Banks will not allow inspections-FALSE
REO properties can be inspected and most banks encourage you to do so.

Banks will not make repairs-FALSE
You can not go to the bank with a laundry list of items will an expectation that they will make the house as good as new. However they will in most cases remediate mold or other environmental hazards, fix broken major systems and repair leaky pipes.

You Can’t Use A VA Loan to Buy a Foreclosure-FALSE
Yes you can use a VA loan to buy most foreclosures. The home you are buying must be your primary residence. If the VA appraiser indicates repairs see the above myth and ask the bank for the necessary repairs.

Banks will not provide HOA or Condo Documents-FALSE
This may vary by state but in Virginia this is not true. If an agent tells you that the bank has said they will not provide the documents suggest that they re-read their listing contract. They can not do anything that is in violation of State Law and it is the seller’s responsibility in Virginia to provide the documents.

Buyers Must Use the Banks Settlement Company-FALSE
The banks may give you a “deal” to use their settlement company but they can not require that they use their company. Again this may vary by state but in Virginia our contracts clearly state that buyers have a choice of settlement company and the bank can not force you to use theirs.

If you are thinking about purchasing a foreclosure in Northern Virginia give me a call.  I understand the difference between truth and “mythconceptions” in REO sales.

5 thoughts on “Northern Virginia REO "Mythconceptions"

  1. The bank owes the condo fees from the date that it acquired the property until you go to settlement. You are not responsible for the previous owners past due condo fees. If the condo has a significant number of past due owners you may find that you end up paying by either special assessment or significant increase in your condo dues in the next few year even if you aren’t responsible now.

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