How to Buy a Bank Owned House
With the surge in foreclosures in recent years, there are more bank-owned homes and properties on the market for a discount price. Banks often just want to get rid of some of these homes to erase them from their bad debt accounts. Sometimes banks just want to sell these homes and recoup some of the money they are losing due to taxes and other expenses. Buying a bank-owned house is not difficult if you know who to contact and what to do.
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Instructions
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Contact the banks and real estate agents in the area. The banks and real estate agents in the area where you want to buy a bank-owned home usually have lists of foreclosed properties. Sometimes, foreclosures are even listed on the Multiple Listing Service, or MLS, which is a service used by the real estate industry for listing the homes that are available for sale.
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Search the public records for any financial information about the house you are considering. You can find information such as how much back taxes are owed on the property or if there are any liens against it. These expenses will be added into the price of the house or you will need to pay them before buying the property.
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Do the math. When you have decided on a property that you want to consider buying, crunch some numbers to get the best bargain. Calculate the amount the bank would need to sell the home to break even. This figure would include costs and fees associated with the foreclosing of the home, liens that the bank had to pay to take ownership of the property and also the unpaid balance of the mortgage. You will also need to know how much money will be needed to bring the house up to code. Subtract the total of these costs from the estimated market value for a starting price to offer for negotiations.
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Contact the bank that owns the property you want to purchase. Ask to speak with the bank-owned homes department, asset management department or the REO department to talk to someone involved with properties that the institution owns. Make an appointment to tour the house.
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If the property looks like something you want to purchase after taking a tour, make an offer with the bank's asset manager or REO officer. Negotiate a price agreeable to both parties, and work up the agreement in writing to close the deal.
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Tips & Warnings
When buying a bank-owned home, deal with a lender or real estate company that has many of them available. They will be more likely to negotiate a lower price to get rid of a property.
Compare the price of a bank-owned home, along with needed repairs, taxes and other costs, to the price of a traditional real estate property. You may not be saving money with some bank-owned properties.
