Are bank owned properties the best buy? Not in all cases. If your thinking of buying a bank owned property ask yourself this first:
- How many times has the home been robbed? - Many bank owned properties have had the windows busted out, the copper taken, the stove remove and there may be damage in areas not seen.
- Will the bank pay for repairs? - No in most cases. Your buying the house as is.
- How much Home Owner Association dues are owed on this home? - Some HOA's want you to pay for all the dues the first owner never paid. And that could add up to thousands in some areas.
- How much money will it take to fix the yard? - When a real estate agent gets the home to the market for the bank, the home has had the water and power turned of for about 90-160 days. The lawn, trees, bushes and everything else has died. When you drive in an area and see lawn brown, those are the bank owned properties.
These questions are just a few to ask yourself. I'm not saying that REO homes can not be a good deal. In most cases they are not. The banks are not in a big hurry to sell them. They never see the homes and send real estate agent to the home to value it based on damage and market value. And the bank will still price the home high in most cases. Do your research first. Find an real estate agent who has experience in the REO market and those would be agent who had their license in the early 90's. Look at as many homes as you can and call around a find out what the repairs would cost to fix and add that into your bottom line. Always get the home inspected. The bank may not give you money for repairs but you will know what is damaged. The inspection could run you a few hundred dollars but it will save you money in the long run.
just be careful and do your homework.