Is Buying a Bank Owned Home Right for You?

Barely a day goes by without the media reporting on the flood of foreclosures taking place across the United States. According to a RealtyTrac press release issued earlier this year, one in 374 houses in the U.S. received a foreclosure filing in April, the highest monthly rate since the company began tracking in 2005.

But instead of seeing doom and gloom from these numbers, many view foreclosures as a once-in-a-lifetime opportunity to buy bank-owned properties at below-market rates.

Some seek to buy in bulk, and they often get the best deals. Individual purchasers may find foreclosures to be a bit more challenging. “The only way to pick up these properties for cents on the dollar is to have cash upfront and buy a minimum of about 10 properties,” said Manny Alvarez, a CENTURY 21 system member. “For individual purchasers, banks don’t like to go below 7 percent of the market price within the first 30 days of their listing.”

Still, Alvarez said there are deals to be had—and discounts do vary throughout the nation.

Here are some tips for buying a foreclosure:

- Make sure you have the cash not only for the purchase but for any repairs required after you close—these properties are often distressed and require extensive repairs, Alvarez said. Plus, traditional financing may not be available.

- View the house in person, and get it inspected.
- Don’t make an unreasonable offer. Many banks are getting multiple offers now, and your offer can be rejected before you have a chance to increase it.

If you’re interested in a foreclosure, it’s essential to work with an experienced agent who can negotiate aggressively with the bank. Our team at CENTURY 21 Adams & Barnes has worked with bank owned homes and have the know-how to help you take advantage of this unique market place.