In general, foreclosure properties can be classified into pre-foreclosures, bank foreclosures and government foreclosures. Pre-foreclosures are properties in distress and owners would like to sell it immediately to recover some equity they might have on their homes. The problem with pre-foreclosures is their availability. On the other hand, government foreclosures can only be bought from HUD-certified real estate brokers. You must also submit a sealed bid as offer to government foreclosures during their offer period.
Meanwhile, bank foreclosure properties are re-possessed homes that survived foreclosure auctions. Commonly called real estate owned, these properties are also offered at very low prices. If you want to buy bank foreclosure properties, you are in for a real treat. Since bank foreclosure properties can be bought directly from banks, there are certain advantages you can enjoy.
First, you can negotiate. Many banks today have a large inventory of bank foreclosure properties. Because of this large inventory, banks spend a lot of money on holding costs that include maintenance fees, taxes and insurances. When a buyer walks in, they are more than willing to negotiate. You can begin with the property’s list price. It would be best to research on current real estate market prices so you’ll have an idea if you are actually getting a good deal.
It would also help if you check the bank foreclosure properties for structural damages. Any repair costs can be shouldered by the banks if you discover damages before closing any deal. Or you could ask for the bank to give you a bigger discount so you can repair for the repair costs.
For more convenience, you can even get your mortgage loan from the same bank. This way you can negotiate payment terms, interest rates and deposit amount. Some banks can offer even you mortgage loans with just 3 to 5% deposit.
If you want to move into a different city, you can still take advantage of bank foreclosure properties without having to spend a considerable amount checking them out. To attract more potential buyers, banks usually enter into listings contract with real estate brokers to sell their bank foreclosure properties quickly. You can subscribe to reliable foreclosure listings that feature the bank foreclosure properties’ location, list price, days on the market and even photos.
Another advantage of buying bank foreclosure properties is the guarantee that the title is clear from any liens or other encumbrances, unlike distressed properties or those sold at foreclosure auctions.
Buying bank foreclosure properties can be really good investments. You can use them as rental properties or fixer uppers that can be sold again for a considerable profit.
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Sharon de Dios writes for
MostlyForeclosures regularly. You can get more information on
Bank Owned Foreclosure and other tips at www.mostlyforeclosures.com.
