Buying a Bank Owned Property
If you want to purchase a home, you might want to look into buying a bank owned property. A bank owned property is a home that has become the property of the lender after as a result of the home not selling after foreclosure. Bank owned properties make up a large portion of the housing market, but there are some basic considerations you need to take before you purchase one.
Where Can I Find a Bank Owned Property?
You can usually find bank owned properties in three places: bank websites, online specialists, and the MLS.
Many banks have entire sections of their website dedicated to listing bank owned properties.
Many real estate websites distribute foreclosure listings for free. You will be able to search properties according to various qualifications you have.
Many lenders will list their bank owned properties on the Multiple Listing Service, you will be able to ask your real estate agent for help.
What Do I Need To Do Before I Purchase a Bank Owned Property?
Get an inspection and appraisal.
Bank owned properties aren’t automatically bargains because they’re owned by the bank. Remember, banks are a business so they will price their homes competitively according to other similar homes on the market. You will want to hire an independent appraiser to assess the true value of the home.
You will also want to have an inspector look at the home as many bank owned properties are sold in an “as-is” condition.
In general, banks will clear the home’s title before listing it, but you should double check. If you don’t, you could be liable for outstanding liens and taxes.
If you want to purchase a home, you should get pre-qualified by the lender who owns that particular property. If the home you are purchasing is in less-than-optimal condition, your financing options will be limited.
Be aware of Timing.
Because you’re dealing with a bank owned property, you need to keep in mind that the whole process won’t move as quickly. Your offer will need to be reveiewed by multiple companies and individuals. You likely won’t be met with a counter offer, because banks will need to show their investors that they property is priced correctly.