Pertinent Facts on Bank Owned Homes
Bank owned homes are popular options for people who want to own properties due to their sheer number. When home owners fail to meet their mortgage obligations, the lender will begin foreclosure proceedings that will end with the ownership being transferred to the lender. And since owning homes is not really among the business operations of banks, these homes will be sold on the market at a price that completes the loan that was not paid.
Banks will try to get the best price they could for the homes they sell but they are very open to negotiations because it is more important to sell of these bank owned homes in the soonest time possible. Considered as non-performing assets, banks need to convert them into capital quickly. If buyers are cautious to avoid heavily dilapidated homes, they may be able to acquire a good home at a significantly reduced price, even at half the property’s market value.
The first method a bank would use to sell a property is through an auction at the county courthouse. If the homes do not sell through this manner they will hire a certified real property broker to sell the homes for them. The property will also be included in a multiple listing service, where more people can see the property. While most homes can only be purchased through a bank appointed broker, some banks do accept offers directly from individuals in some cases.
Making an Offer to Buy
An offer to be made to the bank should have the amount that the buyer is willing to pay, a request to inspect the home, the method the buyer will use for paying and for how long the offer is valid. After the bank receives the offer they will most likely make a counter-offer. This is usually done to satisfy the bank stakeholders that the bank tried to get a higher price for the home. At this point the buyer can make one last offer that the bank can either accept or deny.
One thing to look out for when purchasing bank owned homes is the fact that all these homes are sold as is and the bank will not pay for repairs. So when doing your inspection you should carefully assess cosmetic or structural damages and factor the cost of repairs to your offer. Otherwise buying a real estate owned property is neither complicated nor hard and buyers should not be wary of them.