Occupants Included - Bank Owned Home Buying

By
Real Estate Broker/Owner with Realty Works Temecula BRE No: 01233850

Bank Owned Homes With Occupants Included. 

Sometimes occupants can be hostile and no information about a lease, possible lease, eviction attempt or possibility of an eviction can be obtained! 

These properties come with many disclaimers and disclosures, stating that the new buyer gives up, not only their right to inspection, but must also sign an additional purchase agreement.

Bank attorneys have come up with a purchase agreement for bank owned homes with occupants, that includes an "Occupancy Acknowledgment".  The "Occupancy Acknowledgment", states that the buyer is aware that occupants come with the home and that no information about the occupants is available prior to purchase. 

There is no lease in place and no access can be gained before purchase, furthermore, no communication with the occupants is allowed.

No guarantee of any entry to the property after escrow is closed either.  

The first time I saw this listing I thought it was a "note sale", where the buyer was purchasing the note from the bank with the burden of foreclosing on the defaulting owners.

But this is different, the bank has completely foreclosed and the owners are unable to move or are refusing to move. 

The property comes with a huge discount.  An example in my area is that comparables for this one particular, Occupied Bank Owned Home are $350,000.00.  

For the inconvenience and burden of having the new buyer deal with the occupants the home is priced below $200,000.00.  

The recordings for this home will look like this:

Recorded Document Date:     05/20/2011        01/28/2011            11/10/10             09/02/2005                

              Recording Type:    Final Bank Sale   Trustees Deed   Judgment Amount     Sale in 2005                               

                      Sale Price:        $220,000         $310,500               $510.00             $535,000

There are savvy buyers who have staff, and attorneys that know the laws and can be successful at gaining access to the property but this type of sale is not for everyone!!!

Consumers are confused about recording amounts now because this is what the public sites such as Zillow and Trulia, use any and every recording for sold comparables.   

Can you imagine the confusion that this new wrinkle is going to make?

There was a question on Trulia about this the other day....a consumer asked this question, "How Can A Property Sell three times in a year for extremely different amounts!!!

This is only a small part of the disclosure that the buyer must sign. But it will give an idea of the tone of the purchase agreement.

                CASH ONLY OFFERS. NO INSPECTIONS OR OTHER CONTINGENCIES WILL BE ALLOWED.

  • BUYER IS NOT TO DISTURB OCCUPANTS. Buyer will have no contact with the current occupants until the sale has closed and funded.
  • Buyer is aware that the subject property is currently occupied and seller cannot convey possession at time of closing. If a lease exists, at the expiration of the lease term, the occupant's lease may or may not be renewed.
  • Property is being sold AS-IS.
  • If buyer chooses to evict occupants post-funding, Buyer will be solely responsible for initiating any eviction proceedings. Seller is under no obligation to provide any information regarding any current eviction proceedings to Buyer. As such, Buyer understands that Seller will not provide any case numbers, current disposition of any eviction proceedings, nor contact information for Seller's attorney. Further, the progress and/or outcome of any current eviction case will have no bearing whatsoever on this Purchase Agreement and its terms, including the mutually agreed upon Close of Escrow date.
  • BUYER HOLDS SELLER HARMLESS FOR ANY DAMAGES RELATED TO PROPERTY CONDITION. BUYER IS ASSUMING ALL LIABILITY RELATED TO PERSONAL 
  • PROPERTY AND DEBRIS REMOVAL. PROPERTY SOLD AS-IS, WHERE-IS. SELLER MAKES NO WARRANTIES OR GUARANTEES AS TO THE PROPERTY CONDITION.


Again, this type of purchase is not for everyone but it can offer a huge discount on property if one is prepared to remove the occupants....contact me for more information!

Contact me via the methods below for information about living and playing in Southwest Riverside County, California!

 

Jane Grant Southwest Real Estate Telephone: 866 621-0155

FACEBOOKLinkedINU-TubeTwitterTrulia, Search For Homes

Southwest Real Estate, Temecula 

 

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Broker of Record- DRE 01109492
Southwest Real Estate, Inc. 
Telephone: 866 621-0155

Temecula Homes For Sale

Riverside County Homes For Sale

"Riverside County Living"

Click Here for disclosure of non affiliation!

 

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Rainer
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Brett Reichel
Pacific Residential Mtg., LLC - NMLS 1477 / WA CL-1477 - Clackamas, OR
MLO 210215

Really good post - very helpful!

May 17, 2011 01:12 PM #1
Ambassador
781,053
Jerry Newman
Green Home Realty, 210-789-4216,www.Selling-SanAntonioHomes.com - San Antonio, TX
Texas REALTOR, San Antonio Military Relocation

Hi Jane, Not only does it take a "Cash Savvy Buyer", but I would highly recommend an attorney too. Fully understanding all the ends and outs of these type deals will always help any buyer.

May 17, 2011 02:16 PM #2
Rainmaker
658,478
Realty Works Temecula
Realty Works Temecula - Temecula, CA
Real Estate, Temecula, Murrieta, Menifee

Bret:  Thank you!

Jerry:  That goes without saying and I did include the word attorney in my post right under the recorded sales prices!  But thanks for making is a strong point in the comments where people read the most!!

May 17, 2011 02:42 PM #3
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Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

How interesting Jane with occupants still in these properties. As a buyer I would not like this set up. Say you own the house, NOW, you have to get them out of there.

May 17, 2011 03:38 PM #4
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Kathleen Daniels
KD Realty - 408.972.1822 - San Jose, CA
San Jose Homes for Sale - San Jose Probate Agent

Jane, What a mess the banks continue to create and get away with. Clearly a purchase like this is not for everyone. It is for the skilled, experienced investor who has a shark attorney on their team.

May 18, 2011 12:52 PM #5
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Rainmaker
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Realty Works Temecula

Real Estate, Temecula, Murrieta, Menifee
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