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Essential Information that you should Learn About Bank Owned Foreclosures

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By : John Cutts    99 or more times read
Bank owned foreclosures take place whenever a house owner falls behind on his home loan repayments. The loan provider will begin the property foreclosure proceedings and attempt to offer the home in public sale or auction. Should the house remain unsold following the auction, it goes back to the financial institution that provided the loan in the first place and become REO property. This can results to advantageous possibilities for individuals who want to make investments securely within the real estate industry. If you wish to boost your career in real estate, there are basic yet crucial information you'll want to understand to help expand your knowledge of the industry.

Importance of a Title Search

Investors prefer bank owned foreclosures because they are assured of a clean title. In other types of foreclosure there is the possibility that the title is burdened with liens and back taxes that the new buyer would have to be responsible for. With banks, the titles are all free of holds or liens. The risk of inheriting encumbrances on the property's title is nil with bank owned homes. Banks even offer title insurance for good measure.

Availability of Financing and Possibility of Profit

With bank owned homes, buyers are able to avail of financing that is well suited to their ability to pay. As long as they have a good credit score and a solid source of income, they can qualify for a loan and even negotiate for reduced down payment or rate of interest.

Real estate investors well versed in the art of flipping homes for profit are partial to REO homes as these homes can be purchased for a fraction of their actual value. Banks are continually under pressure to lighten their inventory of foreclosed properties as it costs money to keep and maintain them. A bloated portfolio likewise gives the impression that the bank may not be conscientious with their lending, which may turn off its clientele.

Foreclosures Are Sold As Is

Almost all types of foreclosures, bank owned foreclosures included are sold at the condition they were in at the time of foreclosure. It is prudent to ask permission from the bank to inspect the home prior to finalizing the purchase. A professional home inspection will enable potential buyers to impute the costs of repairs into their budget and decide whether the purchase will still be viable.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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