Before signing the contract to purchase bank owned houses make sure you have the basics covered
. Bank owned houses came under the bank's ownership after an unsuccessful auction. These properties are sold at auctions after their former owners fail to meet their loan obligations. Banks want to be able to sell of these houses in the quickest time possible so they offer discounts, incentives and other perks to encourage buyers.
Your research when buying bank owned houses begins with the area where the house is located. Ensure that the offer you make and your negotiation for a price reduction is lower than the average cost of homes to ensure that you are indeed getting a bargain. Are there schools and hospitals nearby, is transportation adequate and are the local government services strong enough to ensure a good living environment? A local real estate broker with specialization in foreclosures can give you valuable insights about these things.
Checking the Timelines
The value of bank owned houses are greatly influenced by the length of time it has been in the market. Oftentimes homes that have been on sale for a while will fetch a lower cost but the savings you make might just be applied to home repairs. You need to make sure that you also have enough time to inspect the property with a contractor who can provide you with an assessment of the cost of repairs. Properties that have just recently been put up for sale may cost more but might need minor repairs only so it takes a little balancing act on your end to determine which type of property would be best for you.
Banks usually deal with brokers, after receiving your bid through your broker, the bank can either accept or counter it with their own offer. At this point you may still counter their counter offer after which the bank will finally decide whether to accept or decline.
Your broker should be able to make a comparative market assessment so that you can negotiate from a position of strength. You have to be sure that you have also studied the title of the property to check for outstanding taxes or other holds attached to the house.
As added value, banks will offer a title insurance and pest control certification for the property. They will also handle the task of evicting the occupants of the home. In a sense, bank owned houses are the closest you can be to purchasing a brand new home, the negotiation is short and stress free and you can walk away with a great bargain.