Strategies For Buying Bank Owned Foreclosed Homes

Banks have become major resellers of homes that they have repossessed after the owners fail to meet their mortgage obligations

. In the housing market bank owned foreclosed homes are also known as Real Estate Owned properties. These homes are subjected to foreclosure and is sold in a court administered auction, if they do not sell in these auctions, they revert to the bank and form part of its assets. As owning houses is not really in line with the bank's operations, they put these houses up for sale.How to Make Your ApproachThere are various ways of approaching a bank to purchase a home. If you are already in the business and have overflowing liquid assets running in the millions, you may just find an attractively marked down cluster of bank owned foreclosed homes. These deals usually go through bank-appointed real estate brokers and sometimes the terms and conditions get confused and convoluted. Then again, as you're already in the business, you would have some working knowledge of how to close these deals.Smaller investors or first-time purchasers would mostly still deal with the brokers but in a much simpler way. The trick is to find a broker that specializes in bank owned foreclosed homes. The area's local realtor's board would have this information. The first thing you want to have is a list of homes that would require a lot of repairs or renovation as these are the ones where you will get great discounts.Banks usually favor the very first buyer to make an offer, they may make a counter-offer, which you may still counter until they agree. Once they have locked on you they are obliged to sell you the home. Good thing about banks is that after the initial haggling, the rest is quite easy. They will deal with you even if a higher offer comes along.If you have a relationship with a certain bank then realtors can be left out of the negotiations. Bank representatives can let you in on some of the houses they have for sale and present you to the officer in charge of bank owned foreclosed homes as a potential buyer. Banks will want to work with someone they already have a history with, a valued depositor or a very good loan payer. With a little initiative and persistence you can get the best deal for your new home either from a broker or directly from your neighborhood bank.

by: Joseph B. Smith

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