Bank Owned Foreclosures
Low Priced Bargains Can Be Found In
Bank Owned Foreclosures.
If you feel like the escalating costs of real
estate have priced you out of the market, think again. Bank owned
foreclosures can be your path to an affordable first home.
For people willing to do a bit of homework, the foreclosure market offers the best opportunities available in real estate today.
Real estate and financial experts point toward
significant growth in available foreclosure properties, so there’s never been a
better time to line up your resources and educate yourself about this previously
hidden market. It’s not unusual to save from 20 to 50 percent of the market
value on a foreclosure property, and certain bank owned foreclosures offer savings of
percent or more! With the full-blown subprime mortgage crisis upon us, there really are
tremendous bargains out there. You simply have to know
where to look.
Web-based services such as
RealtyTrac give consumers access to foreclosure and
pre-foreclosure information that was previously available only to professional
real estate brokers and investors. Today, home buyers can use these services to
identify and research potential home purchases, as well as to find the tools and
professional resources they need to help them close the deal.
provides all the foreclosure data for both MSN House and Home, as well as Yahoo! Real
Estate. They have already compiled a list of over 600,000 bank owned
across the country.
The keys to a successful foreclosure property purchase are diligence and
patience, along with taking an educated approach to investing in this market.
Here are five tips to help you close a deal on a
1. Learn about the different types of properties and the foreclosure process.
Not all foreclosures are the same! You need to educate yourself on the
difference between the three basic types of properties, including
notice-of-default (NOD), notice of trustee sale (NTS), and real-estate-owned REO,
as well as the positive and negative aspects of buying at each stage of the
As a rule of thumb, the best savings can be made at the pre-foreclosure stage,
where home owners can avoid a foreclosure and lenders can save the time and cost
involved in going through the process. Another critical point in the process is
immediately prior to the auction date, when all parties might be most open to a
2. Secure financing early
It’s important for a buyer to be pre-qualified before engaging in discussions
with a seller. This ensures that the buyer is in a financial position to
purchase the property, and is in the strongest possible position to negotiate.
3. Engage a real estate agent as a “buyer’s representative”
There’s a distinct difference between a buyer’s and a seller’s representative.
Buyer’s representatives have the home buyer’s interests at heart, and are
charged with finding the right property and negotiating the best price for their
clients. Picking the right real estate agent will make your life much easier.
Ideally, select an agent who specializes in the foreclosures market and has
specific experience in REO properties.
4. Do your homework
Purchasing foreclosure properties is somewhat more risky than buying traditional
real estate properties. But, with that risk comes reward in the form of much
higher potential savings. With the right examination and due diligence, buyers
can significantly reduce the risks. As with any purchase, timing is everything!
But, it makes sense to give any property under consideration a thorough
examination, including determining its condition and value, finding out the
amount in default and the remaining loan balance, and running a legal investing
report to make sure the property is free of any financial liabilities. Of
course, it never hurts to foster a positive relationship with the seller!
5. Make a realistic offer
If you want to be taken seriously as a buyer, you must be realistic when
preparing an offer. Lenders aren’t likely to give properties away, particularly
in a real estate market where prices continue to rise. Additionally, homeowners
in financial distress may be difficult to deal with, particularly early in the
foreclosure process. An educated buyer—one who knows how much is owed on the
property and what its market value is—can usually come up with a realistic
offer; one that offers significant savings, while meeting the requirements of
The bottom line is be reasonable, patient, do
your homework, work with an experienced lender, and bank owned foreclosures can become a personal
gold mine for you.
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