Bank owned properties are properties that have gone through the foreclosure process. For some reason, these properties did not sell at the foreclosure auction and therefore, remain on the books of the related bank. Typically, homes at these auctions do not sell, primarily because the minimum bids on these properties are often higher than their current market values. So, a majority of homes being auctioned are not good deals. However, with the help of a seasoned bank owned property investor, the bargains can be identified and seized upon.
When an investor seeks to buy a home from a bank, the investor should be aware that he or she is dealing with a corporation rather than an individual. The bank representative has never been a final decision maker, and any deals presented to that bank representative must usually be taken to his or her superior for approval. Frequently, several people within the bank’s roster of employees must review and approve the transaction. Even when offers are tentatively approved, they often come with the disclaimer, “subject to corporate approval.” Luckily, a number of days are usually given with the notice so that the buyer knows how long the waiting period will be. The interactions a buyer can experience when dealing with a bank can quickly become complicated, so it is important to seek guidance of Your Personal Financial Mentor because he is aware of the process of purchasing bank owned properties and can guide you how to make profitable investments.
When making an offer presentation, it is extremely important to make the presentation as professional as possible. It is important to have loan commitments in place beforehand. Also, it is critical to be able to produce documentation from your loan originator. The bank will sell the property on an as-is basis, so the buyer is responsible for any repairs that might be necessary. Therefore, it is important to hire a property inspector to examine the home ahead of time.
When your offer is accepted, the buyer then needs to carry out the financing. Some buyers have access to large cash reserves and can simply write a check for the selling price. Other buyers may utilize conventional financing, FHA financing, FHA repossession financing, or an FHA rehabilitation loan. The FHA-backed programs allow the user much more favourable terms than those that are available under conventional financing. These FHA programs usually offer very low down payments and low interest rates. Only certain mortgage brokers are qualified to issue FHA loans, so it is important to seek out brokers who can issue these highly beneficial loans.
Categories: Real Estate