Buying a house owned by a bank

The new $ 700 billion government bailout is evidence of the chaos surrounding today’s housing market. With sales nationwide on a steady decline, more consumers with adjustable-rate mortgages have found it increasingly difficult to sell their homes and pay for higher mortgages, key issues that have caused the number of foreclosures to skyrocket. Although foreclosures are very upsetting for a homeowner in danger of losing a home, they present great opportunities for the prospective home buyer looking for a good business. Since lenders are eager to recoup losses on a repossessed property, bank-owned homes can typically be purchased at discounted prices.

In most cases, the bank that owns a foreclosed home only requires a portion of the outstanding balance to reconcile a mortgage loan debt. This means that bank-owned homes are generally available at up to half the property’s true market value.

Bank-owned homes are a hot commodity for two main reasons: They are less expensive than conventional real estate, and they tend to be in reasonable condition. This alternative is very attractive to the real estate investor, as you can find tremendous bargains. Excited to get their hands on valuable property, the buyer will often pay outstanding debts, such as HOA fees and taxes, to pave the way for a quick sale of the property. In the end, this results in a win-win situation for both parties involved.

There are numerous ways to get a bank repossessed property. One method is to buy the home before the bank seizure. After the foreclosure phase is over, the home typically goes to auction where any eligible buyer can bid. If the house does not sell at auction, it becomes the exclusive property of the bank that executed it. At this point, banks generally advertise the property, giving others the opportunity to purchase it as their own home or an investment property that has the potential to produce a substantial profit.

Although bank-owned homes offer numerous benefits, caution should also be exercised before buying. Please note that all repossessed properties will not result in a large amount. You should always do a little research before making an offer to the bank, making sure the price is competitive with other homes in the area and not more than market value. When contacting the bank, be aware of what caused them to sell the property. Since many of them simply want a quick sale to bypass maintenance and administration costs, you need to know the responsibilities that may be related to the title, as well as the environmental and structural concerns. The best advice is to talk to the bank representative and ask as many questions as possible. Don’t be afraid to start low, increasing gradually, if that is what the circumstance calls for. The fact that the bank is desperate to make a sale gives it a substantial advantage. They may be willing to sell the property for a bigger bargain than you initially thought.