BUYING BANK OWNED PROPERTY  -    Introduction

Purchasing Bank Owned Property is riskier than purchasing an owner-occupied property.  The normal due diligence process, requirements for seller's disclosures, general fairness in the contract, adjustments after the closing, division of fees, quality of title and certainty of the closing date are all very different.  The purpose of this article is to explore the differences in all of the above-described features of a bank owned transaction vs. a traditional transaction in order to help Buyers navigate serious pitfalls in purchasing bank-owned property.

In my opinion buying bank owned property should be left to investors.

That being said, there are a few exceptions to that hard rule:  If you are prepared to fully inspect the property, pay to turn on utilities, battle a little on the contract, pay slightly higher costs and close one to four weeks later that your contract closing date, then you may have the temperament for this type of closing.

FIRST – THE GOOD NEWS!

You can buy a bank owned property for a price that is below market value!  OK, that’s really all the good news there is.  Beyond the discount price there is a really unfair amount of risk shifted to the buyer.  The risk is primarily in the condition of the property and secondarily in the condition of the title.  These are the two real dangers that the buyer faces.  And these dangers / risks are the cost of the discount.

The next section of this blog will review inspection issues. . .