The latest $700 billion dollar government bailout is proof of the turmoil surrounding the current real estate market. With countrywide sales on a stable decline, more consumers with adjustable rate mortgages have discovered that it is progressively more and more difficult to sell their houses and pay elevated mortgages, factors that have caused the number of foreclosures to spiral. Although foreclosures are very unfortunate for the owner in peril of losing a home, they offer great possibilities for the would-be home buyer looking for a good investment. As lenders are anxious to recuperate the losses of a repossessed property, banked owned homes can generally be bought at discounted prices.
In many cases, the bank that owns a foreclosed home only needs a fraction of the outstanding balance to settle the debt on a mortgage loan. This means that bank owned homes are generally obtainable at up to 50 percent off the actual market value of the property.
Bank owned homes are a desired commodity for two major reasons – they are less expensive than conventional real estate and tend to be in reasonable condition. This option is very alluring to the real estate investor, as substantial bargains can be located. Excited to get a hold of a valuable piece of property, the buyer may pay outstanding debt, such as association fees and taxes, to facilitate a speedy sale of the property. Ultimately, this turns out to be a win-win situation for both involved parties.
There are multiple methods to go about acquiring a bank foreclosed property. One method involves purchasing the home prior to the bank seizure. Once the foreclosure period concludes, the home usually goes to an auction from which any qualified buyer can place an offer. If the home isn’t sold at the auction, it becomes the sole property of the bank that foreclosed upon it. At this point, banks generally advertise the property, allowing others the chance to purchase it as their personal home or an investment property that has the potential to generate a substantial profit.
Although bank owned homes offer plentiful benefits, one should also take care prior to purchasing. Be mindful that every foreclosed properties will not result in a good deal. You should always do a bit of research before making an offer to the bank, assuring that the price is in line with other homes in the neighborhood and no more than the market value. When communicating with the bank, remain conscious of what caused them to sell the property. As many of them plainly want a quick sale to pass up maintenance and management costs, you need to find out about the issues that may be related to the title as well as environmental and structural points of concern. The best recommendation is to converse with the bank’s representative, and ask as many questions as possible. Don’t be afraid to start with a low offer, working your way up, if that’s what the circumstance calls for. The fact that the bank is desperate to make a sale gives you a huge advantage. They may be open to sell the property for a bigger deal than you first thought.