Purchasing Bank Owned Real Estate
Posted on February 25, 2010
Filed Under bank foreclosure real estate |
The new $700 billion dollar government bailout is proof of the upset surrounding today’s real estate market. With national sales on a solid decline, more consumers with adjustable rate loans have found it increasingly hard to sell their houses and pay higher mortgages, factors that have caused the figure of foreclosures to spiral. Although foreclosures are very regrettable for the consumer in jeopardy of losing a home, they offer great possibilities for the potential home buyer looking for a good deal. As lenders are desperate to recover the losses of a repossessed property, banked owned homes can typically be bought at lowered prices.
In many cases, the bank that owns a foreclosed home only requires a portion of the balance to settle the debt on a mortgage loan. This means that bank owned homes are generally available at up to 50 percent off the real market value of the property.
Bank owned homes are a desired commodity for two major reasons - they are cheaper than regular real estate and tend to be in fair condition. This option is very alluring to the real estate investor, as tremendous bargains can be obtained. Excited to get a hold of a valuable piece of property, the buyer may pay outstanding debt, such as association fees and taxes, to facilitate a speedy sale of the property. In the end, this turns out to be a win-win situation for the both the bank and the new owner.
There are numerous methods to go about obtaining a bank foreclosed property. One technique involves purchasing the home before the seizure process goes into full effect. Once the foreclosure phase concludes, the home typically goes to an auction from which any eligible buyer can place an offer. If the home isn’t sold at the auction, it becomes the exclusive property of the bank that foreclosed upon it. At this point, banks generally advertise the property, giving others the chance to purchase it as their personal home or an investment property that has the potential to produce a substantial profit.
Even though bank owned homes offer numerous benefits, one should also take care prior to purchasing. Keep in mind that every foreclosed properties will not result in a good deal. You should always do a bit of investigating before making an offer to the bank, assuring that the price is competitive with other homes in the neighborhood and no more than the market value. When approaching the bank, remain mindful of what caused them to sell the property. As many of them simply want a quick sale to pass up maintenance and management costs, you need to find out about the responsibilities that may be associated to the title as well as environmental and structural issues. The best advice is to converse with the bank’s representative, and ask as many questions as possible. Don’t shy away from starting with a low offer, working your way up, if that’s what the circumstance calls for. The fact that the bank is motivated to make a sale gives you a large advantage. They may be open to sell the property for a bigger deal than you originally thought.
Anita
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4 Responses to “Purchasing Bank Owned Real Estate”
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Can I purchase bank owned properties or do I have to go through a licensed real estate broker?
There is no law that requires you to use a real estate agent. People sell their own houses all the time. But they are experienced experts in their field, have passed the licensing requirements saying they know what they are supposed to do. The buyer seldom gets charged a commission from their agent, the agent gets that from the seller. So unless you know exactly what you are doing, it would be smart to use an agent when buying.
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You don’t need to go through a Realtor to buy real estate being sold by anyone unless a Realtor is representing the seller, and even then you don’t need your own representative.
If the bank has hired a Realtor to sell their property, it won’t cost you any more to have a Realtor working for you in your corner which can come in handy if you aren’t experienced in buying real estate. Just be careful not to get taken advantage of or end up getting sued if you decide to go it alone. Good luck!
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I am a Realtor
Banks very seldom accept offers from individuals in selling bank owned properties.
They have farmed this chore out to licensed real estate brokers.
So the answer to your question is you have to go through a local broker to purchase a bank owned house.
Now you can have an agent represent you if you so desire, but not necessary as you can use the banks agent.
I hope this has been of some use to you, good luck.
"FIGHT ON"
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