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Bank Owned Properties?

By
Commercial Real Estate Agent with Century 21 Boardwalk 6502376872

It seems that many buyers are falling into the idea that bank owned properties are the only good deals out there. Here are a few things you might want to consider when you are thinking of buying bank owned properties.

1. Often, the homes are not well cared for.

2. Since they are not well cared for, you might want to think about the extra costs you may have to add to the price of the home.

3. Always have inspections done on anything that is even close to questionable. Better to be safe than sorry. It never hurts knowing what type of improvements you will need to make and what the cost might be. Factor these costs into the price and make sure it is still "worth it".

4. If you are not going to pay cash you might have to do some improvements before you even own the home. Financing a home in rough condition is sometimes the biggest decision you will have to make in your purchasing process. If there are improvements that need to be done in order for you do get financing they will typically have to be paid for by the buyer. Most banks do not want to pay for things that you need in order for you to get financing. They know that it is a buyers market and they are willing to move on to someone who is more qualified that does not require improvements to get their financing.

5. Get the details on what type of financing you will be getting. Some programs are more strict than others. Example: Some programs require the home to NOT have ANY peeling paint. Simple fix but you would have to do the work before you even own the home. Other situations can be more complicated and costly. Talk with a mortgage professional to find out what works best for you. 

6. Don't restrict yourself by just looking at foreclosed homes. There are great deals out there regardless of who owns the property. Homes that are not forclosures are typically in better condition being that someone is living there. You won't have to worry as much about how and if things work or not. Most likely, if someone is living in the home, the mechanicals are in good working order. You know that when you go and look at a home, and it's 36 degrees out but it is warm inside the home, the furnace is probably on and working. One less worry.

7. In areas that experience winter months, many forclosures are "winterized". This means that all the utilities have been turned off and the plumbing has been drained and filled with some type of antifreeze solution. This can be problematic when trying to have inspections done. For instance; If the home has a boiler furnace and the water supply is turned off, someone will have to pay to have the water turned back on in order to have the furnace inspected to make sure that it is in good working condition. Not to mention that the furnace will most likely require natural gas to run also. Also, when "de-winterizing" a property, you might run into leaking plumbing or other complications due to the fact that these mechanicals haven't been turned on in a while.

8. List prices are not set in stone. At the same time, you aren't going to get something for nothing. If you heard of a deal that someone else made and it sounds too good to be true, than it probably is. Most times, just like with anything else, you get what you pay for. Extra costs are usually the details that you don't hear about. I wonder why that is? Maybe they don't want anyone to know about the bad investment they made...just a thought.

I hope this has been informative and I hope this doesn't keep you from considering purchasing a new home. Every situation is different so don't give up. This is to help you to know what questions to ask and what to be cautious with. If you have any questions or there is something that I didn't mention that you are curious about, feel free to contact me anytime and I will do my best to help.

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