Buying Bank Owned Homes in Orange County

Bank owned homes are exempt from certain disclosures compared to standard sales. While the seller in a standard transaction must reveal all pertinent information related to the home, a bank doesn’t. It’s assumed that because of the foreclosure process, the previous owner wasn’t too cooperative disclosing anything about the property. The banks don’t know about any problems, and I think they don’t want to know. If the bank auctions off the property to an investor, the investor like the bank doesn’t need to disclose. Investors wouldn’t buy orange county homes at auction if they ended up with issues they would have to disclose. They know even less about them than the bank. All this means is you have to be a little more cautious when buying bank owned homes.

Here are some important tips on buying bank owned homes:

1. Make sure to do a home inspection and any other inspections the home inspector suggests. Usually a home inspector goes through the home in orange county very carefully looking for any sign of damage. If they find electrical, plumbing, roof or other problems, they will recommend a specialist to investigate further. So, if they find mold in the home, they will recommend a mold inspector. If you are buying a home with a mortgage, you can be assured that the bank will require at least a home inspection. Just don’t skip any further investigations if they are recommended by the inspector. Remember that a homeowner that is behind on his mortgage payments is probably behind on his home maintenance too.

2. Termite inspections are also a must do. Again, it’s required to get a loan, but if you are paying cash, don’t skip this step. Foreclosures do have a greater chance of having termites. Neglectful owners and empty properties are two factors leading to termite infestation.

3. Make sure to hire a roofing company to inspect the roof. It’s important to have the roof looked at by a specialist. Most of the time your home/termite inspectors can find roof problems, but roof inspectors can find bad roof patches and poor workmanship. If the roofing was done incorrectly, you could have future leak problems. If the previous owner had the roof patched and the damage fixed, you will not be aware of the potential problems in the future.

4. Don’t forget to buy that home warranty. Make sure to get a warranty on the home. If anything goes wrong, you want to be covered for at least the first year. Some banks will not pay for the warranty, but you should buy it anyway. It’s a small investment to insure you don’t end up with an expensive repair bill. Before the warranty runs out, consider paying to extend the warranty for additional years. It usually comes out to $50-$75 per month. That’s a small price to pay for continued coverage.

5. Ask the neighbors if they are aware of any problems with the home. Usually the neighbors know everything about a home on their block. If there was fire damage, water damage, mold or a death, chances are the neighbors know about it. They can spot a repair vehicle parked in front of a home a mile away. It’s better to find out from your neighbors before you close escrow instead of afterwards.

6. Have your Realtor look up the history on the home. Any past loan information, tax information, etc. may be helpful to piece together what happened to this property in the past. Your Realtor can check on sites like foreclosure radar to find out how much the investors paid for the home at auction. That way you will know a few more pieces of the puzzle.

While most bank owned homes are sold "As-Is", it doesn’t mean you can’t negotiate for repairs. Banks will tell you that they don’t want to pay for repairs, but are they willing to walk away from a transaction because they wouldn’t pay $600.00 for a water heater or make a $1500.00 roof repair. Chances are the next buyer will find the same problem and want the same concession. The bank may offer to pay half of the repair which is better than paying 100% yourself.







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If you are interested in buying a home, consult a reputable Robert Sontag Real Estate agent serving in Orange County area to help you out here. You can also browse for Irvine Homes, Orange County Real estate, Orange County or Orange County Property listing at housesearch123.com.