Bank Owned Homes

What to Know about Bank Owned Properties

When a homeowner fails to pay their mortgage, their loan goes into default. After being in default without resolution for so long, depending on the state of residence, the property goes to foreclosure. At this point, the bank reassumes the ownership of the property, these properties are called bank owned homes. Banks aren't interested in making huge profits off of these homes or holding out for the highest bidder. They'll generally list these homes very cheaply so that they can get the money that they lost and be rid of the property quickly. After all, banks aren't property managers, and they don't want to be.

How Cheap are Bank Owned Properties?

You can find bank owned properties for as low as $5,000 or $10,000 in some instances, although most will be more moderately priced. Generally, the average is between 30% and 60% off of the actual market value of the property, depending on how much the bank is owed. If you take the time to check out the properties near you, you can find some great deals on bank owned properties. Some of them might need a little fixing up if they were abandoned or sat vacant for awhile. Also, some owners get hostile when they become involved in the foreclosure process and cause damage to the home before being evicted. This is rare, but it can happen. Regardless of the situation, banks generally sell their bank owned homes in as-is condition, meaning that no repairs or concessions will be made.

What's the Point of Buying Bank Owned Properties if They Need a Lot of Work?

Even when the properties need work, they're still much cheaper than they'd be if they were move-in ready. Generally, you can buy a bank owned property and fix it up and still spend less than you would buying a home at full market value. Plus, it'll give you an affordable way to make your dream home a reality, because all of these bank-owned properties have great potential.

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