A Bank owned property is that property that goes back to the financial institutions when the foreclosure auction fails it is generally seen that in many foreclosure auctions not even a single bidder bids. And this is quite prominent fact also; because if the property would have that much value so as to pay back the loan then the owner would have better sold it and paid the financial institution.
The bidding for the sale of foreclosure properties usually start with the price that includes the total loan amount plus the accumulated interest plus the legal representative’s fees and some other costs occurred during the foreclosure method. Other than all, if you want to bid at this auction then you need to have cashier’s check with you for the complete amount of bid. Then if your bid is more than any other bidder then you will become the proprietor of that property from that very moment.
As we know that whatever is owed to bank is always more that the mortgaged property so generally the foreclosure bids starts from high prices and as a result most properties are remained unbidden during the foreclosure auction and then these properties become bank owned properties.
So after the failure of foreclosure auction the financial institution now possess the home and now there is no such mortgage loan. So now the financial institution will do some required patch ups and they will also try to talk with the government authorities for the removal of any previous tax liens.
Although the bank owned property (ROE) might not be that good buy. So you need to do a detailed research before taking any such property. You should make this thing sure that whatever amount you are paying should be comparable to the property prices in the neighborhood and another important thing to be considered here are the costs of repair and renewals. And you should never get into the ‘bidding war’ and consider it as a prestige issue and pay over market value.
How the Bank owned property is sold?
Each financial institution works in a different way to some extent. Each of the financial institution will try to get the best price possible. So these days almost all financial institutions have made separate departments to take care of the bank owned property.
Bank owned property Condition
* All financial institutions will try to sell a property in “as is” condition.
* All financial institutions will try not to see any of proprietary disclosures.
* Generally financial institutions will not provide any financing facility on bank owned properties.
One thing that all should remember is that bank owned property are sold at close to their current full market value and are they are not like what is shown on late night television shows.