Properties that are owned or held by a bank instead of a person is known as bank-owned property. If indeed the homeowner misses the mortgages and the residence goes into foreclosures, the property might become bank-owned. Since bank-owned homes sometimes sell at a discounted price, they might be appealing to consumers and real estate speculators. Whenever you consider buying a bank-owned house as either permanent residence or for the purpose of investment, you may have to make certain compromises.
1. Visit the Banks themselves
The majority of big banks have websites which you can visit that advertise the properties or lands that they own and that are for sale. Credit unions, lenders as well as smaller banks may also have their own. So it is really good and recommended to visit them. You have to visit the banks themselves in order to know if the listings are legitimate and for you to have an assurance.
2. Make use of a REO platform
You may also browse for REO, foreclosure and bank-owned listings on different sites on the internet that specializes in these types of properties. The said sites include Hubzu, Xome, Equator and a lot more. However, not all listings in the mentioned sites are not bank-owned but the majority may also include distressed properties wherein it might come with a discount.
3. Hire a real estate agent who specializes in Investment Properties
A good local agent of real estate can actually assist you with your quest. You will want someone who knows a lot about the local investing sector and has a lot of connections. If they are well-connected, there is a strong possibility they’ll be able to recommend a few possible homes to you. They are also the one who might be able to link you with regional banks that have inventory or notify you of future sheriff’s sales or even other estate auctions that you should be aware of.
4. Examine the MLS
There are a lot of banks that list their properties, estates or houses in the general MLS, making them easily accessible for everyone in the listing sites. However, you have also to bear in mind that typically, listings will be mixed with other properties, therefore, it is advisable to use filters in order for you to carefully find the exact property you are looking for. Moreover, you may also filter the price to know what comes up and to know what is aligned to your budget.
What are the Benefits of purchasing Bank-Owned Property?
Below are the pros of purchasing Bank-owned properties.
- Price is cheaper: Since foreclosed homes are classified as distressed assets, their owners normally want to sell them as soon as feasible. Properties that are foreclosed are sold at a much cheaper price than the average value in the market or it could also be sold with discounts for those clients who are interested in the said property.
- Purchasing process is accurate and legit: The transaction that will happen is transparent and clean as you acquire such assets or property from the bank. Banks tend to be transparent and accountable when it comes to the terms and conditions as well as legal documents of the asset or the property you just acquired.
- Taxes and Utilities are updated: If the premises are owned by a bank, they are most likely to be responsible for paying taxes, monthly fees, and other relevant costs.
- Transferring of titles is done immediately: If there are no ongoing court issues, the land titles are promptly handed towards the lender in a foreclosure. Once the property is bought, the bank assumes ownership and the associated responsibilities.
- The acquired asset will be sold off at a higher price: These foreclosed houses may be converted into homes with the help of such upgrades, repairs, and renovations, whether you are a client or investor of the property. This raises the property’s worth, allowing it to be sold at a greater price on the market.
Who should purchase a bank-owned property?
Bank-owned properties can be purchased by anybody, but the person most likely to do so is someone looking for a bargain. Real estate investors, in particular, see bank-owned houses as a chance to put a little money into the house and gain a lot more out of it by leasing it out or reselling it to potential owners.
What banks provide Foreclosed property?
Once the house or the property is marketed, listed or advertised, you can acquire it from banks with the help of a real estate agent. The bank will frequently transfer the house to an auction firm after it has been posted and advertised with an agent of real estate, promoted for a specific amount of time, and has not yet been sold. Some of the banks that provide foreclosed property include Bank of America, HSBC, Regions Bank, CitiMortgage, Well Fargo, and last but not the least, Fifth Third Bank.
Is it cheaper to buy bank-owned property?
The most appealing feature of a foreclosed property is its reduced price, which is frequently much cheaper than comparable properties in the same neighborhood. The majority of foreclosed properties are sold at a significant discount on market value, with the precise amount varied by area. Moreover, the seller may also offer additional incentives which may include low down payment and interest rate, or even the appraisal fees elimination as well as such closing costs. If the house has been confiscated, the buyer might gain even more as the sheriff’s office is not willing to keep the house, and banks are not that interested in becoming landlords. Financial institutions often prefer to get rid of foreclosed homes as soon as possible. The more or longer that the bank holds such properties, the higher chance that it will be offered at a low price.