Dangers Of Buying A Bank Owned Property
Todays real estate market is distressed at best
. This is due to the mortgage meltdown of 2005 2006. Of course, there was some speculation that the market would return to normal in 2006 but ever since then it has been in a constant downward spiral. The result of this is that there are now a lot of opportunities available for people to purchase devalued real estate from banks. While all of this may sound great, not everything is as it appears.Bank owned properties are those that the bank has gone the complete foreclosure process with. This means that they have actually taken over the propertys title and evicted the previous owners so that they can sell the property. At this time many banks will turn off the utilities in order to reduce their costs but this also makes it much harder for you to inspect the homes HVAC, electrical and plumbing systems. You also have to remember that the bank has forcefully removed the previous owners from this property. These people were probably quite upset. Today it is quite common to hear of this resulting in damage and destruction being done to the homes property, appliances, plumbing fixtures, cabinet and other fixtures. There are also a lot of properties that have a lot of water or drywall damage. For these reasons you will want to make sure that you get a very thorough inspection before purchasing a bank owned property.
Besides the possible property damage that may occur, you should also know that banks will oftentimes take a long time to respond to an offer. Of course, these response times are still quicker than it would be if you were to go through a real estate company. This is because the bank has already done all of the up front legwork in order to determine the homes value and thus deciding what price they would be willing to accept.
With these things in mind, you should only consider purchasing a bank owned property if you are:
Not concerned about finding the perfect home.
Absolutely attached to the home and simply have to have it.
Ready to take on the risks that are associated with purchasing a distressed property.
Prepared to get dirty while making repairs and cleaning up the property.
Not in a hurry. Remember, you may encounter a long wait for a reply from the bank whenever you submit an offer on a property.
Now you can see why a lot of people will tell you that these bank owned properties are best suited for investors who are purchasing it for its value instead of for homeowners who are looking for a new home to live in. After all, investors are use to putting in multiple offers on a variety of properties without caring which ones are accepted just as long as they get the property for a great value. Once they have a contract in place, they can then rescind any other offers.
by: Joe Cline