How to Buy a Bank Owned Property

Foreclosed homes, also known as bank-owned real estate, are houses that have been repossessed by the bank after their previous owners ended up defaulting on their mortgage loans and consequently had their property rights terminated. The ownership of the house then passes onto the bank, which is eager to make a quick sale, and usually offers the home up at a reduced price.

 A foreclosed home can be a good investment – in addition to the bargain price at which it is being offered (usually 40 to 50% below market price), you will not have to deal with anyone but lenders (since there are no homeowners). In addition, there is the least amount of risk involved in the purchase of this sort of property, as a foreclosed home can be visited before it is purchased, and a full-blown home inspection can be carried out too. This sort of property can be bought during the pre-foreclosure stage (this is when the homeowners are given a warning, and still have the option to retain the house if they work something out with their lender), at the auction (when the home is foreclosed, and the bank conducts an auction to recoup losses by selling to the highest bidder), or when it officially becomes bank-owned property (when no sale takes place at the auction – this is the best stage at which to purchase a foreclosed home).

Foreclosed property can be a great way to cash in as far as real estate is concerned, and buying a bank owned property can be an easy process if you know how to go about it.

• When looking to buy bank-owned real estate, you need to start by locating foreclosed homes. There are various websites which make foreclosure listings available, and in addition to searching online, you can also browse through official public records in order to look for homes that are now classified as bank-owned property.
• Once you settle on the foreclosed home you want, proceed to arrange for finances. Get in touch with a lender who can get you pre-approved for a mortgage, or contact the owner of the property directly – since banks are looking for a quick sale, they might offer incentives to interested buyers.
• Hire or consult a real estate agent or a realtor who specializes in dealing with bank-owned property. This way, you can get expert advice on the asking price, and on how much you should offer to the bank.
• Visit the house you are interested in, in order to inspect it for any major faults or repairs required. Have a formal home inspection conducted, so you can figure out how much you will need to spend on repairs, and whether the house is suitable for buying.
• Finally, when you have satisfied yourself on all accounts, go ahead and make an offer to the bank. In order to improve the chances of your offer being accepted, make sure you name a price which is in line with recent market trends and sales in that particular area.