You may be looking at some homes on the market that are bank-owned right now, and for a good reason. More often than not, bank-owned homes offer discounted prices and lower interest rates.
For these reasons alone, it can already be tempting to nab one right away. That said, there are some factors you should know about before diving in.
Foreclosures Aren’t Always the Best Value
Most bank-owned homes are foreclosures. Ever since the housing market collapsed in the late 2000s, more and more homeowners have been unable to make their payments, resulting in the loss of their homes.
Often, foreclosures come with their fair share of problems. You may have to deal with broken appliances, broken windows, and damaged drywall. This can make your purchase not only more expensive to fix but also a headache.
Make sure you do your research and make sure you are getting a good deal that is actually more competitive than others in the market.
You Should Expect a Counter-Offer
While negotiating a bank-owned property is similar to dealing with a private seller, it’s pretty much expected that whatever offer you give will be matched by a counter-offer from the bank.
Banks do this as a move of good faith and business value for their investors and relevant shareholders. If you have your heart set on a certain home, you may have to make a few offers over time to get the deal you want.
You May Want to Get Inspections Done Yourself
Banks don’t usually inspect properties for you when they put them up for sale. This means that unless you’re buying a brand new house (which is unlikely in this case), the property you are planning to buy may have been neglected by the previous owners and may have significant damage.
Unlike private sellers, banks are not legally required to disclose any problems and special circumstances that a property may have. So, make sure you get all the necessary inspections done yourself.
The Fine Print Will Be Crucial in Your Contract
You will want to make sure you look at the fine print of your contract. Different banks will implement their own guidelines and include addendums that add to the contract of sale.
You don’t want to get duped in this phase of your purchase, so you should carefully parse through all relevant documents.
Be Prepared to Go on a Bid War
If you are interested in a specific property and the bank knows it, it is likely that you will find yourself in the midst of a bidding war.
They can, in fact, set the initial selling price as high as they want, depending on the market and the general demand.
They will try to get the highest bidder, so expect to have some competition on the home you’re eyeing. That said, you should make sure you stick to your budget as these bidding wars may end up with a final value that is more than what the property is worth.
Conclusion
These pointers should help you navigate the search for a bank-owned property that will actually be good for you. To get the best deal, it’s really about doing your research, being careful, and staying on top of market changes.
Check out Orlando REO Professionals for a top-notch selection of bank-owned homes in Clermont, FL. Our process helps you find the exact property you’re looking for. Call today for more information.