According to WIKIPEDIA:

Real estate owned or REO is a class of property owned by a lender, typically a bank, after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank negative equity: the minimum bid in most foreclosure auctions equals the outstanding loan amount, the accrued interest and any costs associated with the foreclosure sale including attorneys' fees".

"After an unsuccessful auction, the bank will go through the process of trying to sell the property on its own. It will remove some of the liens and other expenses on the home and try to resell it to the public, either through future auctions or direct marketing through a Realtor. Generally speaking, bank REO properties are in poor shape in terms of repairs and maintenance; however, real estate investors will often go after these properties as banks are not in the business of owning homes and so, in some cases, the low price can more than compensate for the condition of the property".

"Real estate owned." Wikipedia, The Free Encyclopedia. 17 Mar 2008, 11:05 UTC. Wikimedia Foundation, Inc. 24 Mar 2008 <http://en.wikipedia.org/w/index.php?title=Real_estate_owned&oldid=198830778>.

How do you protect yourself from this "AS IS" clause, when buying Bellingham bank owned real estate?  Well, a home inspection is always recommended, as it's a good way to find hidden problems that the seller may or may not know about.  I recommend an inspector that is ASHI Certified, which insures that they are qualified, as well as, insured in case they miss something in the inspection.  The appraisal, which will be ordered & required by your lender also has guidelines to protect their investment, which should also spot any potential problems.

When it comes to negotiating Bellingham bank owned real estate, you should negotiate with the "AS IS" clause in mind with your initial offer.  Some agents & buyers have the mind set of putting a high offer in, getting an inspection, and then asking the bank to lower the price or fix problems that came up in the inspection.  This may work with normal sellers, but the banks usually refuse to do any work to bank owned properties and they are most often not going to reduce the price.  If you decide to choose this route you could be wasting your inspection money especially if you're banking on seller concessions or a price reduction...negotiate the "AS IS" clause into your initial offer, enough said.

To make a long story short, when buying Bellingham Bank Owned Real Estate the "AS IS" clause shouldn't make you run the other way with your tail between your legs, but heed caution, due your due diligence, & utilize your real estate team to help you make wise decisions.

Thinking of making an offer on a Bellingham Bank Owned property?  Well, if you've made offers on distressed properties before, you're probably aware that banks & lenders have their own set of rules.  One of them being the bank's request of your "highest & best offer" on the Bellingham bank owned property.  Usually the "highest & best" phrase comes into play when there are multiple offers.  Instead of the bank countering each offer individually, they will counter all offers verbally by asking for "highest & best" from each bidder. 

As a buyer, there's no way of knowing at what price the other offers came in at, not to mention the fact that for all you know there might not even be other offers on the table.  The weight of certain factors can make or break an offer, so the highest doesn't always mean the best.  Financing terms, as well as, how the offer is written will also make a difference in whether your offer is accepted or not. 

If your looking for a Bellingham bank owned property have your Realtor run comps., determine the property's after repair value, & bid out any repairs that are needed, so that you don't offer to much for a property.  Have an idea of what your exit strategy is before you start negotiations.  For instance are you going to live in it for 5+ years, fix-n-flip it, or hold it as a rental?  These factors will help you determine how much the property is really worth to you and help you define your margins.

Learn more about the 1st time Home buyers tax credit (1st time doesn't really mean 1st time)

If you're shopping for Bellingham Real Estate you might have noticed that there is a bit of excitement around the topic of Bellingham Bank Owned Properties & you might be wondering what the fuss is about.  Well, Bellingham Bank owned properties are usually priced at or above fair market value, but occasionally there are some that have a really low listing price.  The low listing price can mean one of two things...it may mean that it's a great deal, priced-right or it could mean that it's a real dump in a bad location.  We've seen it all here in the Bellingham Real Estate market.

If, in fact, they are great deals, they may seem to-good-to-be true...& sometimes they are.  Bank owned, low listing prices, is a strategy that some banks use to create bidding wars in order to get buyer emotions involved so that they'll pay more for a property.  Sometime it works, sometimes it doesn't.  Here in the Bellingham real estate market I've only seen a few bank owned deals that actually sold for more than they we're listed for.

If you're shopping for a Bellingham bank owned property, know what you're willing to pay before the negotiations begin.  Don't get caught up in a bidding war, as there will be others.  Also, base your offer on other distressed comparables in the area & know your exit strategy.