From 9445626c0fa75c39c76dd7ee3e98710c039804b5 Mon Sep 17 00:00:00 2001 From: casielenehan37 Date: Wed, 20 Aug 2025 08:38:55 +0800 Subject: [PATCH] Add Buying a Bank-Owned REO home in new Jersey: Key Considerations --- ...e in new Jersey%3A Key Considerations.-.md | 23 +++++++++++++++++++ 1 file changed, 23 insertions(+) create mode 100644 Buying a Bank-Owned REO home in new Jersey%3A Key Considerations.-.md diff --git a/Buying a Bank-Owned REO home in new Jersey%3A Key Considerations.-.md b/Buying a Bank-Owned REO home in new Jersey%3A Key Considerations.-.md new file mode 100644 index 0000000..fea4511 --- /dev/null +++ b/Buying a Bank-Owned REO home in new Jersey%3A Key Considerations.-.md @@ -0,0 +1,23 @@ +
Are you purchasing an REO home in New Jersey?
[questionsanswered.net](https://www.questionsanswered.net/lifestyle/best-rated-snowblowers-your-home?ad=dirN&qo=serpIndex&o=740012&origq=homes) +
The procedure of buying bank-owned residential or commercial property in New Jersey has special challenges, including buyer handling certificate of occupancy, the residential or commercial property being strictly "as-is", and restricted appraisal and [mortgage](https://realestate.getaccelerate.com) . Learn more in the video or records below!
+
VIDEO TRANSCRIPT:
+
Good morning. This is Earl White, Real Estate Attorney. This is a video about five things you need to know when purchasing an REO bank owned residential or commercial property. This is when the bank owns the residential or commercial property after a foreclosure has been completed. The procedure is pretty different compared to buying other kinds of residential or commercial property and other standard sales, so we'll focus on 5 big things.
+
First, the attorney review process is extremely different. Normally, in New Jersey, as soon as it goes into attorney review, the buyer's attorney and seller's lawyer work out a "rider", which is basically an addendum to the contract, adding in any needed changes and some popular modifications. There'll be a normal local attorney representing the buyer and the seller. With an REO residential or commercial property, bank owned residential or commercial property, the bank, the seller, is not going to have a regional lawyer. In reality, usually there won't even be an attorney designated. There'll be some sort of property supervisor, possibly the real estate agent will be handling it carefully or another representative, however there's not going to be any attorney for a buyer's attorney like myself to negotiate with any special changes to the agreement.
+
There's not going to be another lawyer that I might call and attempt to explain something special about the offer. Any unique customizations are not going to get put in during the attorney evaluation procedure. That also suggests that there's some popular defenses I would generally add throughout lawyer review that I would not be able to include an REO sale, so something along the lines of appraisal contingency defenses, additional defenses for code violations, things relating to back due taxes that may be available in the future, things of these natures, extra defenses I would include if I could work with another attorney sort of like myself, they would comprehend.
+
With an REO, there's no other lawyer and they're not going to be versatile on making any changes throughout attorney review. What will happen during lawyer evaluation though is that you'll sign the regular real estate agent contract and after that there'll be like an addendum, like a bank addendum to the agreement with some lovely heavy handed [terms beneficial](https://reswis.com) to the bank. The lawyer review is going to be more streamlined, it's more of a take it or leave it. We truly need to push for something, we can, however it's going to be more take it or leave it on the bank's terms in attorney review. That's one difference is the lawyer evaluation procedure is simply rather various and more rigid with the purchaser having less room to make any changes to the initial contract or the bank's addendum.
+
Another important thing to be knowledgeable about with the [REO sales](https://villa-wanderlust.com) is that the timeframes are rigorous. The majority of the sales that ... Most of domestic sales, the deadlines are versatile. They're not "time is of the essence". If an individual misses a due date by a day, you submit your [evaluation request](https://utahoffice.space) a day late or your mortgage commitment's a day late or you pass the closing date a week, not truly a huge offer because the agreements are established that method.
+
REO deals are not like that. The dates generally are established to be time is of the essence. On the buy side of the deal, you nearly always have more commitments. You got to do assessments, you do your appraisals, you get your mortgage. It's more on your side, so you require to ensure you're on point with all your dates and all your timeframes because there isn't going to be much versatility developed into the contract.
+
REOs are likewise strictly as is sales. I know regular sales, even in the base real estate agent contract, paragraph 16 says, "Seller represents the sale is as is." All the sales are typically as is, but usually the purchaser will make the point that, oh, we're actually going to treat this as an as is sale. We're not going to make any ask for repair work. Once you start decreasing the sales process, purchaser has an inspection, something new is discovered and you still might make an ask for repair work or credit or price deduction. With the bank owned residential or commercial properties, they are really strict as is sales.
+
The bank is not going to change the price. They're not going to begin providing credits. To even get that, to even try to make that credit, it would be hard due to the fact that, as I pointed out, there's no lawyer for me to even submit a request for an agreement addendum to. It would take the bank 10 days just to even consider the request, right? A quarter of the way to the closing it would take them to even just consider and decide on this. That's how institutional it is.
+
They [genuinely](https://lifetimeinvestmentrealty.com) are strict as is sales, and that is also some danger for you putting time into the offer since considered that it was an REO, the prior owner got foreclosed on, they might not have actually been taking the very best care of the residential or commercial property given that they understood they probably were going to lose it to the bank. There might be physical issues there. I indicate most REO contracts do offer you still a right to check and you still have a right to cancel and get your deposit back. Again, the bank is going to treat it as a true as is sale and is not going to negotiate credits or repair work.
+
Another huge distinction with these REOs sales is that the purchaser manages the certificate of tenancy and smoke certificate. Most sales, 99, if not 99.9% of the time, seller generally has the commitment to get the certificate of occupancy, which is when a city inspector, you call the city billing department, they send inspector out to the residential or commercial property. They look for code infractions, habitability problems, anything like that. They release a certificate that says the residential or commercial property adhere to a zoning code or something like that.
+
Normally seller obligation. In the [initial](https://circaoldhouses.com) real estate agent agreement, it is by default seller responsibility. REOs is the opposite. They're going to press that onto the buyer and there is constantly heavy handed language therein. Again, you can't actually work out these things that well. If you're going to do the REO sale, there's risks here. They're either going to shift the responsibility to the buyer to pay for all the costs for the certificate occupancy and also smoke certificate, which is getting [carbon monoxide](https://property.listiwo.com) gas detector, fire extinguisher, smoke alarms, et cetera, to the buyer.
+
Now, the risk here, and different sale, I would have protection, I might develop defenses for this, however not for this type of one, I would add something like buyer is ... Say, buyers, "Okay, I'm going to handle duty for CO. Although it's not regular, that's how I'm going to get my offer accepted." I would include a protection like if the expense to get the CO to the [purchaser](http://sandhavenoutback.com) is higher than 2,500 bucks, then the buyer can cancel if the seller won't begin the difference. Right? That's not going to fly in REO, that type of security. Right? You're going to need to take on the responsibility to get the CO. If their expenses turn up and they're more than 2,500, who knows what they could be, then if you don't finish the sale, you could lose your deposit. That's a danger that you take doing an REO offer.
+
The other thing I'm discussing, the essential distinction here exists's no appraisal contingencies. In the preliminary real estate agent agreement, the word appraisal isn't even pointed out, right? There's no formal appraisal contingency consisted of in the real estate agent contract, so you need to include that in lawyer review. As I discussed in point one in this video, you can't actually make much adjustments like utilizing attorney evaluation riders for an REO offer. What about the [appraisal](https://sleeping-options.com)?
+
For the appraisal, you're not going to get an appraisal contingency for an REO deal. What it'll boil down to regarding the appraisal is that if the residential or commercial property appraises so low that your mortgage gets rejected, then you can still cancel the deal and you can still cancel the offer upon getting a [mortgage denial](https://leasingangels.net) letter. If it's actually low, you're not on the hook to move on with the deal and make up the cash immediately, so you don't have to make up money, however it will just come down to if your mortgage gets authorized or not authorized.
+
The factor that is not great due to the fact that, state, you're putting 20% down, right? If it under appraises by, say, $20,000, you may still get approved for the very same quantity of the mortgage and not get denied, however you simply would have less equity in the residential or commercial property. Instead of being a 20% down mortgage on the appraisal worth, generally under evaluated, maybe now you're authorized for the very same quantity, however it's just 15% down on the appraisal worth. Now because you're not 20% down, you need to begin paying PMI or become worse terms.
+
Again, you're not going to get a formal appraisal contingency. You have less equity in the residential or commercial property, less terms, even worse mortgage terms. It's not a concern if you can get denied for the mortgage, but you might not get denied. You still may get approved for your mortgage despite the fact that it under appraised, in which case then you're stuck to worse terms and no chance to get out of the offer and simply sort of need to eat the lower appraisal in that circumstance.
+
Okay, hope this video was valuable. Let me understand in the comments any concerns about REO sales, how those agreements work. If you need aid with any real estate deals, feel totally free to reach out 201-389-8275.
+
This blog uses to buying a an REO bank-owned home in Newark, Jersey City, Hoboken, Paterson, Elizabeth, Union City, West New York, Bayonne, East Orange, West Orange, North Bergen, Clifton, Bloomfield, New Brunswick, [Atlantic](https://inmocosta.com) City, and throughout Bergen County, Essex County, Hudson Couny, Union County, Morris County, Somerset County, [Atlantic](https://luxuryproperties.in) County, Monmouth County, Middlesex County, Ocean County, and Passaic County.
+
Buying, selling, or moving property? Visit the Contact Us page for attorney assistance with realty purchase and sales.
+
Members of our free Real Estate Law Newsletter get exclusive access to resources for property managers, investors, and other realty specialists. Join today!
\ No newline at end of file