Smart Tips for Successful Buying Bank-Owned Foreclosures
Bank-owned foreclosures refer to those that have become bank-owned after a public sale. These properties can range from single units to multi-family units, condominiums, apartments, townhouses, duplexes, and other types of structures. Once these properties become REO or bank owned, they will be listed as for sale, usually through listing providers or real estate brokers. Although you can choose from a wide selection of properties from a foreclosure list, it is important to take note of the following guidelines to ensure that your investment is adequately protected and remains an asset rather than a liability.
Always inspect the property
Property inspection is very important. Photographs showing the facade of a property or any of its angles will not compensate for a thorough personal inspection. Photos will not show leaks, broken tiles, broken windows, molds, and other necessary repairs on the property. A licensed home inspector can help you assess the damage and condition of the property, as well as provide you with a written estimate of the repairs that need to be made to the property.
An eye inspection will not only provide you with first-hand knowledge of the current status of bank-owned foreclosures, but will also give you an idea of the type of neighborhood that surrounds them. You can also ask people in the neighborhood some questions about their personal experiences living in the area and other questions that would give you a clearer idea of what to expect. The information you will get from a home visit will help you make your decisions later.
Research the title
Once you’ve found a property that interests you, do a title search. You may want to search public records to see if there are any outstanding debts, bonds, or judgments on the property. Any notation should give you an idea that the property may still have a monetary debt to satisfy. You don’t want to buy a property for which you would have to pay twice the amount you would have paid for one with a clean and undamaged title. If the property has outstanding taxes or property ties, you may have to pay them before you can get the title.
Negotiate with the bank
Although banks necessarily want as much money as they can collect from a property to recoup any of their losses, they may still be open to negotiation, especially if the property in question is one that has been on the market for too long. Banks are typically flexible when it comes to bank-owned foreclosures that need major repairs. If you are one of those who can manage a superior property repair and remodeling project, whether for resale or rental, negotiating with the bank can give you a favorable result.