Real Estate Owned By Banks
Real estate owned by banks can encompass residential houses, commercial properties, and raw land that has repossessed through foreclosure or returned using deed in lieu of foreclosure agreements. Once banks take possession they sell properties at discounted rates to remove toxic assets from their books.
Buying real estate owned by banks can be a good option for anyone looking to save money. However, the process is often more complicated than buying houses offered by private sellers. The first step involves locating bank owned properties. This can be accomplished by working with local realtors or by searching online.
Banks often publish bank foreclosures via corporate websites. Others enlist help from local real estate agents to list and show properties. Buyers submit purchase agreements either through the listing agent or directly to the bank's loss mitigation division.
There is rarely any room for price negotiations when buying houses from banks. Unlike private sellers who will entertain offers for less than the asking price, banks stand firm and will not reduce prices unless extenuating circumstances surround the property.
The only time banks reduce prices are if extensive damage is discovered during property inspections that was not recorded when they took possession, or if property has been listed for a long period of time. It can be helpful for buyers to locate bank owned homes that have been listed for more than 90 days. The longer real estate goes unsold, the more open banks are to price negotiations.
The primary advantage of buying real estate owned by banks vs. properties for sale via foreclosure auction is banks take care of removing tax liens and creditor judgments, as well as evicted homeowners that refuse to vacate the premises.
Another advantage is that many states grant foreclosed property owners the option to buy back their house within 30 days after it is sold through auction. When buyers purchase real estate through auction it is imperative to research state laws to determine if a redemption period exists.
Although the vast majority of property owners are financially incapable of repurchasing their home after foreclosure, buyers must be aware of the potential. This is especially true for investors who buy bank foreclosures for use as rental properties or for the purpose of house flipping.
Investors often scout out real estate owned by banks because of the reduced prices. In today's market many investors are buying houses with cash to expedite the process. Investors who make cash offers can sometimes obtain reduced prices because closing can occur quickly.
One popular source for buying bank owned real estate is Fannie Mae Homepath. This is a relatively new program that offers residential foreclosure properties across the nation. Buyers can elect to finance Fannie Mae Homepath properties through Home Path Mortgage which offers reduced down payment requirements along with special incentives.
One thing is certain. There are thousands of bank foreclosures available and most are priced below market value. We invite you to learn how to maximize savings and discover how to apply for government grants to purchase distressed properties or offset repair costs in our real estate investing article library.