Most of us know if there are foreclosed homes available on the market today. You can contact a bank or financial institution directly and find out what homes are available. Your reasons for purchasing a bank managed home are as unique as you are but most people do it for the potential savings. A foreclosed property also known as real estate owned (REO) or bank owned property is a home that was once customer owned but is now owned by the mortgage holder. REO or bank owned property is generally acquired as a result of a foreclosure action on a mortgage or if the property was voluntarily turned back to the lender. The investor becomes the legal property owner and offers it for sale to recover the amount owed to it. A foreclosure can occur when mortgage payments are not made over a period of time and efforts to resolve the default are
unsuccessful. While there are many options available now to help people stay in their homes, sometimes foreclosure becomes the only option. In most cases you can take ownership of a foreclosed property in a few months and can often save on the purchase price. The home appraisal, inspection, and financial processes are similar to buying a traditional home. Title and county deed recording issues could potentially delay your purchase.
Banks work with local real estate professionals to set fair market value that reflects the local market and property condition. The condition of the home has a major role in determining the price you will pay. Properties range in conditions from fully distressed to move in ready. A distressed home may be sold at a slight discount if it is sold as is with no repairs. When a bank owned property is sold as is there are a few things you need to think about such as, the fact that real estate investors have already dismissed this house because of a million different reasons so that will leave you wondering about. The house has usually been sitting and deteriorating for a while and oftentimes, the previous owners were most likely upset by losing their property and they could have done some damage by removing or destroying things. Banks don’t keep these homes up in shape; they just sell them, so it’s best to have an inspector to do a very detailed check before purchasing a foreclosed home.
On the other hand, move in ready homes are typically priced at market value. You may be okay with doing renovations on the home or maybe you or your spouse is certified to do some of the work and that should cut down on labor costs a little bit. While more often than not these homes need a lot of work, not all of them do and with the right information you can purchase a bank owned home properly. Also the local neighborhood benefits when foreclosed homes are sold, maintained, and occupied, so it can be a way for you to get a very good price and support the community at the same time. Foreclosed properties are a chance not everyone is willing to take but it could lead to you finding and or creating your dream home.