Negotiate Bank Owned Real Estate
Foreclosed homes or bank-owned real estate can offer a terrific deal for the first-time home buyer or investor. When a home passes through foreclosure, banks want to get these properties off of their books as soon as possible as they pose a management and financial headache, costing them dearly in human and financial capital until a qualified buyer steps forth.
Home foreclosures continue to play a significant role in shaping the housing industry, keeping home prices low, but eventually the crisis will subside and with that will disappear an opportunity for bargain-seeking home buyers.
Instructions
Instructions
1. Know your property. Before negotiating a deal on a foreclosed home, you will want to know everything about the home and the area possible. What is the neighborhood like? Are schools nearby and how well are they rated? What town services are available? Is shopping and public transportation nearby?
You will also want to uncover as much about the history of the home as possible including recent owners, price paid for the home, property taxes and home association fees, comparable neighborhood values and more. Some towns and counties post tax information online, but a visit to the local tax assessor's office will help you uncover that information that will come in handy once you are prepared to negotiate with the bank.
2. Hire a home inspector. Most foreclosed homes are sold as is, which is an indication to you by the bank that their asking price is firm. But do not allow that to stop you from seeking the advice of a home inspector, who can give you a clearer picture of repairs to be made, even outline the costs of making them.
While you may not be able to have the bank cover $30,000 in repairs, you can use your property inspection as leverage once you negotiate. Your home inspector's finding could legitimately reveal that the home has more problems than the bank had thought. With scores if not hundreds or even thousands of foreclosed homes to manage, the bank simply does not have the resources to handle each home foreclosure thoroughly.
3. Present your offer. With home and neighborhood information known, present your offer to the bank. If you are working with a real estate agent, he will do that for you. Like any homeowner, the bank can choose to accept, reject or counter your offer.
Be prepared to have in mind a price you are willing to pay, but be open to the bank agreeing to hold the note on your loan, with lower down payment, smaller closing costs, and perhaps some fees waived. If you are already approved for a mortgage, then the bank may be more receptive to your offer. Find a place where you can agree on price and close the deal, but if you cannot, then be prepared to walk. There are many other home foreclosures on the market for you to consider.
Tags: your offer, home inspector, Bank Owned, Bank Owned Real, foreclosed homes, Negotiate Bank
