Foreclosures Bank Owned

Buying foreclosures bank owned that have been repossessed by the bank is a great way to find a deal. A short sale is ideal because you are helping a homeowner avoid foreclosure but if you are unable to find a homeowner to short a loan for a bank owned property is ideal.

A property that has been through the foreclosure process and did not sell at a sheriff or county auction is purchased back by the bank. The property is now called bank owned or real estate owned property. It may also be referred to as REO property which stands for Real Estate Owned.

When a property is purchased before an auction you are truly creating a win-win situation. The homeowner is avoiding foreclosure and you are getting a great deal (if done correctly) and the bank is avoiding a big loss.

If a property is subsequently purchased back by the bank by an appointed attorney at an auction is is now in the bank's real estate owned inventory.

Banks do not want to buy, sell, maintain or own a house in any way. They want to hold a lien on a property.

A bank will take a large loss on a property to remove it from their inventory and get it "off the books". This creates a big opportunity to get a house at a discount.

Some points to keep in mind when buying foreclosures bank owned are as follows.

1. Get a pre-approval letter from the bank and get proof of funds. A bank wants to make sure you have the money to close before even looking at your offer.

2. Offer less than the asking price. Find out what was owed on the property by looking through the public record and offer less. A bank is ready to dump the property at this point which means a great deal for you.

3. Get a home inspection. A house that has been foreclosed on may have been ill maintained so you should make sure everything is OK prior to purchasing.

Overall you can get a really great deal when you purchase foreclosures that are bank owned. Buying a house through a short sale is best because you are helping a homeowner avoid foreclosure, but REO properties can also be purchased at a discount and with much less stress.

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