You’ve decided to make a bank owned home investment. Do you know where to look for listings? Getting a bank owned property can be a very good move, but you want to make sure you have done your research on the property and are comfortable, especially if you’re going to be living in it yourself.
A bank owned home is also called an REO property. This is a property that’s been foreclosed on and could not sell through an auction. So now the bank who had the original mortgage owns the property and they are trying to get rid of it. Keep in mind that banks do not want to be in the real estate business. Many banks have websites listing all their bank owned home investments. To come up with a selling price, the bank that holds the note will add up the expenses that it incurred in getting the property, the remaining primary mortgage amount and any secondary liens. Depending on the circumstances, it could be well under market value.
Before you plunk down your hard earned cash, get some information about the home. Why didn’t it sell at auction? It is easier to do an in depth inspection once a property becomes a bank owned home investment. Make sure you do this with someone who knows about home repair. You want to have a good idea of what it will cost you to get the property to the point where you can resell, rent or live in it. Add up your potential expenses and come up with your price for the property. Many banks now use outside real estate agents to close the deals so you wont have to deal with a banker who has limited knowledge about the home and surrounding market.