What is a bank owned home?
A bank owned property also called a REO, is when the home reverts back to the bank-mortgagee after the buyer-mortgagor fails to pay the loan. These properties are significant to housing markets and can be a great deal for buyers. But mind you, there are lots of things you should consider before buying those bank-owned homes for sale.
Buying bank-owned homes for sale has great advantage to new home owners. Foreclosed properties have a lower price than of types of homes. But you should know where to look for these properties and to do some math in computing the bid price, interests and insurance costs to be sure that you are getting the best deals on bank-owned homes for sale. Having these tips in mind, you could surely steal the perfect deal.
Tips for Buying Bank Owned Properties
- Get an Appraisal and Inspection
Be aware that these properties are not automatic bargains. Banks are in business to make money, so they price their homes competitively. Remember these guys sell homes for a living, even if you have experience buying a home, the Bank could be selling hundreds of home per month, so they would have much more experience than even the savviest investor. Some properties are discounted because of severe damage or location, while others may not even sell for much of a discount at all. Get an independent appraisal to determine a home’s true market value.
Additionally, understand that some of these homes have been vacant for months or even years, generally are sold “as-is” with no warranties of any sort. Hire a professional to inspect the home before committing to purchase.
Title search Banks generally clear the title before listing a home – but never assume this is the case. Search public records for liens and outstanding taxes, then hire a title company to run a full, insured title search before closing the deal.
- Be smart about your money
If you are planning to get a loan from a financing institution, make sure you’re working with some with experience with REO’s
If the home you’re considering is in good condition, the fact that it is a bank owned properties shouldn’t make it more difficult to qualify for a loan. Similarly, a property in decent shape should not be subject to a higher mortgage rate.
Do your homework before making any offers. Make certain your offer price is comparable to the recent sale prices of similar homes in the neighborhood. Be sure you add in the costs of renovation.
- Patience is Required
Bidding on bank owned homes is not quite like making an offer on a privately-owned home, where owners generally respond quickly.
It is typical for bids to be reviewed by several individuals and companies, which means that it can take weeks to get a response. Banks must demonstrate to shareholders and investors that they worked hard to get the best price for the property, so expect that your offer will be met with a counter offer.
Even after an agreement is reached, the bank may make its acceptance contingent upon corporate approval within five to ten days.
If your credit is good, you may find your bank is willing to loan the full price of the foreclosure – maybe more if extensive repairs are needed. Some lenders require a 30 percent down payment if the foreclosure is going to be used as a rental. You may also find you need to turn to a private lender to finance bank owned homes Orange County.
After consulting with the experts at Integrated Realty Group, you should now be ready to close the deal. Next you will need to start thinking about the renovations, on all the Orange County bank owned homes you have purchased.
Where can I find bank owned homes? Right on this website you will be having excellent tools that you need to search for bank owned properties for sale, as well as professional assistance from our Realtors at Integrated Realty Group. You can search by number of bedroom, price, square footage, and city, to quickly find free bank owned homes listings.
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