Bank owned foreclosures refer to those that have reverted to the bank’s ownership 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 REOs or bank owned, they will be listed as for sale usually through listings provider or real estate brokers. Although you can choose from a wide selection of properties from a foreclosures list, it is still important to take note of the following guides to ensure that your investment is adequately protected and remains an asset rather than a liability.
Always Inspect The Property
Inspection of the property is very important. The photographs showing a property’s facade or any of its angles will not compensate for a thorough, personal inspection. Photos will not show the leaks, broken tiles, smashed windows, molds, and other repairs that are needed to be done on the property. A licensed home inspector can help you assess the damage and state of the property as well as give you a written estimate of the repairs that should be done on the property.
An ocular inspection will not only provide you a firsthand knowledge of the current state of bank owned foreclosures but give you a glimpse of the type of neighborhood surrounding them as well. You may also ask a few questions from the people in the neighborhood about their personal experiences in living in the area and other questions which would give you a clearer picture of what to expect. The information that you will gather from a house visit should help you in formulating your decisions later.
Research The Title
Once you have found a property that you are interested in, do a title search. You may want to search the public records to see if there are any outstanding debts, liens or judgment on the property. Any annotation should give you an idea that the property may still have to satisfy a money debt. You do not want to buy a property for which you would have to pay twice the amount as you would have paid for one with a clean, good title. If the property has any outstanding tax or property liens, you may have to pay for them before you can have the title.
Negotiate With The Bank
Although banks necessarily want as much amount as they can gather from a property to recover any of their losses, they can still be open for negotiations especially if the subject property is one which has been on the market for too long. Normally, banks are flexible when it comes to bank owned foreclosures that are in need of major repairs. If you are one who can manage a fixer upper property and a remodeling project either for resale or rental, then negotiating with the bank can give you a favorable outcome.