07 Mar Why You Should Buy a Bank-Owned Property
Buying a new house on the market can be a lengthy and stressful responsibility. However, before making an offer on that great house, you should know what bank-owned properties are. Bank-owned properties, also known as real estate owned properties (REOs), are homes that do not end up selling at auctions. Thus, the house becomes foreclosed property and is sold at a discount rate with less competition and less risk.
For the home buyers who are seeking one of these properties, here are the benefits of buying a bank-owned property.
1. No homeowners to deal with
Because an REO is owned by the bank, you will be dealing directly with the bank when you buy a bank-owned property. So, since the seller is the lender, you can easily negotiate with the bank on some of the closing costs. Thus, discussing properties with homeowners who are troubled, threatening legal action, or emotionally attached does not have to be in the cards for you anymore.
2. No outstanding taxes to pay
Usually, the bank will always waive any outstanding property taxes that the last homeowners stopped paying for in order to attract home buyers. Thus, there should not be unsettled payments or liens due on the property. Nevertheless, remember to do a title search just to be safe!
3. Option to request a home inspection
Properties that are sold at foreclosure auctions do not have the choice of requesting a home inspection before closing a deal. With bank-owned properties, this is not the case. Thus, it is essential to ask for one before purchasing a REO since they are usually distressed homes that need severe work done.
4. Sold at below-market prices
Most importantly, bank-owned properties are typically sold at discounted prices with great advantages, such as low down payments and low interest rates. However, this does not mean you are always going to get a great bargain. Since some REOs require a lot of repair work, they can actually be just as expensive as homeowner sold-properties. Therefore, the foreclosure buyer should once again, request for a diligent home inspection.
With these solid tips under your belt for the future, buying a bank-owned property should not be a difficult task. However, be mindful of asking for professional help, or a realtor who specializes in REOs. Ultimately, you should buy a bank-owned property because it has many benefits when the process is done right.