Home, Land, Property Buying and Selling - Buying Unlisted Forclosure? LONG

I've been wanting to move to another major city in Texas for about a year now, found a great school district, neighborhood and even a house I like. Last week, my employer advised me that I will most likely be moving to the area.

The house had been listed for at least 6 months or so, I stopped by to walk the outside in June while in town on other business. Looked good on the outside, dated but workable on the inside, very nice neighborhood. A neighbor that was leaving at the time said he'd be happy to tell me about the house.....but he was leaving at the time.

Anyway, before I knew about my move I kinda forgot about the house as I couldn't carry it from half-way across the state. Once I found out about my job, I looked for the listing and it was gone. I called the realtor and he said that it had gone under contract but that when the inspector was inspecting, the water heater leaked (sudden I guess) and caused damage. The owner (HSBC) then removed it from the market and is now waiting on the insurance company to make the repairs.

Now, here I am. I am assuming at this point the original contract is gone. Not a big deal either way. But, can I make an offer on a house owned by a bank that is not listed? I'm not even sure if the realtor still has the listing but I did say I would check back with him in a few weeks to see if the repairs had been made. I would PREFER to offer on the house as it sits now, damage and all, for a drastically reduced price. Is the feasible? Am I just wasting my time?

Here's my thinking....I wanted to update the interior, replace the (small) kitchen and floors throughout anyway. I have no problem replacing water heaters and, in fact, would like to go to tankless anyway. Drywall, paint, no problem. So obviously the damage actually works to my advantage.

The details on the house...
3-2-2 1850ft built 1984
slab, brick veneer, 2 story
Dues about $1100/year
Purchased 2000
Wells Fargo 9-2006
HSBC 1-2007
TAX $130k
ZILLOW $131k
Listed $129k
Lowered $119k
Contracted unkown
Offer $75k-$85K AS-IS

What would I do, just call up the realtor and tell him I want to submit an offer? He didn't sound really motivated to make a sale when I spoke with him but he might just be waiting out a better commission. I wouldn't be hung up on this property but it is in reasonable condition that I can handle it most of the repairs, the price (with improvements) is at the top of my range (and this was the cheapest house by $50k), the neighborhood and schools are stellar and I would be hard pressed to find another deal like this in the school zone for some time.

Sorry, I know lots of info and rambling.

If you did not contact a realtor previously, do not call the realtor. Cal the bank REO department directly. IF they have a contract with a Realtor then they will deal with the realtor's compensation, or refer you to that realtor.

IF you had made any contact at all with the realtor then the realtor will claim some compensation. You can either call the realtor or make the offer directly to the bank, but disclose to the bank that you had previously been in contact with the realtor.

Cool, thanks for the info. I did call him the other day and he told me about the inspection. I will probably just go back to him as I would imagine getting a break on the commission isn't going to be that big of deal to the bank on one property. Also, I figure he's tired of the property so he could probably go to bat for me more on a lower offer. And, since I'd be buying before moving to the area, I'd need help dealing with local stuff like access. I'd want an inspection, even if it is AS-IS so I could know what I'm dealing with.

A couple of more questions along this same tack...

Has anybody ever seen an ASI-IS contract that included a foundation (or foundation & roof) clause? I'm fine working on or paying for everything in between but those a very big expenses.

Also, on a foreclosre, does the bank ever work on financing or are they two seperate entities? I would figure it would be win-win, get the property off the roll and get them some morgage income.

To answer your question on the AS-IS contract. With an AS-IS contract you have the right to inspect. At least in Florida you have 10 days to have an inspection performed and then another 5 days to supply the seller's agent with a copy of the report. If there are repairs necessary that are greater than you would like to spend such as roof or foundation, your realtor can then either negotiate with the seller to see if they would be willing to make the necessary repairs or replacement. Otherwise you can request a cancelation of contract. Keep in mind that most sellers that are selling their home as is don't want the expense or hassle of making these repairs, however, you can most often work something out in regards to the price. Good luck with you purchase.