This morning at our Realtors' Tour Meeting, we had a broker talk about REO (Real Estate Owned) properties. These are homes that have been foreclosed upon, and are made available for us to sell. Problems abound. The banks are not willing to have upfront inspections done on these properties, and this usually costs them more in the long run, since flaws that show up in buyers' inspections often create a renegotiation of the contract, and a lower price. Lender-owners also refuse to use local contracts, and insist on state forms. Then they copy the information on to their own version of the contract, which must be read line by line to make sure that the buyer is protected. One such contract called for a $1500 a day late fee if the buyer didn't close escrow on time! It is best to involve an attorney in these transactions...and well worth the cost.
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