Why Bank Owned Properties Are a Safe Option?

Bank owned property consists of many real estate options including commercial, residential and underdeveloped land. These properties are basically a result of foreclosure and these were returned to the servicing lender. Often banks get distressed and sell real estate properties at discounted prices in order to liquidate the toxic assets. This type of property can be perfect first home, investment property or vacation house. The sale of these properties is usually handled through each lender’s loss mitigation department. Many a times, banks enlist the help of realtors or real estate agents and show foreclosure properties and accept various purchase offers.

It is important for the buyers it realized that mortgage lenders generally do not accept the offer for less than asking price until substance damage is uncovered during the inspection of the property. Banks suffer financial setback from the foreclosure process or mortgage default. The main objective of bank is to recoup with the losses by selling these properties.

There is a good percentage of bank owned properties that require some kind of repair. This becomes truer when you buy residential houses. Unfortunately, the owners of the foreclose property often damage their property as they want to show retaliation against mortgage lender. It is common to find countertops, plumbing fixtures, flooring etc severely damaged.

The banks assess the prices of these properties based on the current market value, minus the expenditures incurred on repairs. The buyers need to conduct due diligence by obtaining the real estate appraisals and property inspections. In case of any unreported repairs, the buyer should obtain photograph damage and repair cost estimates.

Those of you who are in need of cheap homes may want to look into buying houses through these investors, who specialize in wholesaling.

The wholesale investors are also there who can purchase multiple bank owned properties at one go. They buy in bulk so as to obtain the lowest price, which then allows the investors to turn profit at much discounted rates.

You should also consider various government sponsored programs as they offer special financing and low down payments. You should make it a point to buy property only which has been listed for two or more months, as banks many a times reduce the asking rates of these properties. Before you buy these properties make sure that you equip yourself with all the information that is needed on the same.

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