Bank Owned Homes.Foreclosures. Corporate owned.
Buyers often believe bank-owned homes should come at a hefty discount from current market prices - and often, they do. Distressed homes without any sort of new paint or carpet or repairs are sold at minimum pricing, usually to investors but occasionally to first-time buyers and/or buyers who want to make the home their own in a big way.
Occasionally, though, banks will make repairs to homes, including the above-mentioned paint and carpet, and sometimes even lighting fixtures, kitchen and bathroom sinks and faucets, and even plumbing repairs.
The bank I work with does such things. The homes are brought from distressed condition to move-in condition, adding some other needed features so a buyer can move in and doesn't have to do much to make it their own.
Still, we constantly get calls from investors or other buyers that can lean toward attempts to get us to lower the price - sometimes to the extent of seeming to argue!
If a first-time homeowner is looking to buy a bank-owned property there are some caveats. For example, often banks or "corporate" owners don't have the 4-page (Ohio) Residential Property Disclosure Form or Lead Based Paint form, because they had never lived in the property and never knew anything about it. Sometimes, a bank representative will visit the property and evaluate its condition, as well as ordering a Broker Price Opinion for the property. In that case, if defects are found, we are still supposed to notify the potential buyer of such defects (hmm I can't remember where I found that story where that requirement was noted, but yanno, I know I saw it!).
If the buyer qualifies for FHA, then it's possible for buyers to roll the cost of repairs into the loan (via "speedy" FHA 203k program). If the bank improves the property to a certain degree, though, then the load on the bueyr is lessened. Yes? Yes.
At any rate, I'll just say this - and you can voice your agreement or otherwise. Banks either will or won't improve a property. If a property is improved to a certain level, shouldn't that property sell at that level, albeit below market due to lack of disclsures and unknown quantity due to non-occupancy? Or should banks simply not improve properties, let them sit all distressed and ugly outside and inside, and let the buyer not only beware but be uncomfortable?
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They need to at least make the homes - HOMES. This means no leaking roof, floor covering of some kind, toilets and sinks, kitchen cabinets and so forth. If it's missing something like the kitchen sink or a bedroom door, then it needs to be corrected. ALL kitchens have sinks and all bedrooms have doors.
Once it can pass for a house by definition, it should be marketed. I've seen some rough properties where $4,000 would increase the value by $25,000. This is a sound investment, but the banks figure they've already lost enough. DUMB!