Buying real estate owned by banks can be a good option for investors, as well as buyers seeking affordable properties. This might not be the best choice for first time home buyers simply because the process can be complicated.
Real estate owned by banks can include residential homes, condo, townhouses, manufactured homes, and commercial realty. Although properties are often priced below market value they typically require some level of repair. Therefore, buyers must conduct due diligence to ensure the property is worth the asking price.
There are several options for locating bank foreclosures. The Internet can be a great resource and help buyers find an assortment of properties for sale. Buyers can either scout out properties on their own by researching mortgage lender websites or work with a real estate agent. Another option is to network with investors who buy homes or those that specialize in wholesaling.
Those who prefer to work directly with lenders may find it helpful to start their search via the major lenders. Some of the more popular include: GMAC Mortgage, JP Morgan Chase, Bank of America, and Wells Fargo.
Realtors can help buyers locate bank owned real estate anywhere within the U.S. Banks retain local realtors to manage property listings. Many of the major realtors have dedicated sections of company websites offering bank owned foreclosures for sale. Popular agencies include: Prudential Real Estate, Remax, and Century 21.
The Fannie Mae Homepath program offers residential foreclosure properties across the country. This program is sponsored by the U.S. government and offers discounted homes for sale with prices starting as low as $5000.
In addition to offering homes below market value, qualified buyers can take advantage of special financing offered through Home Path Mortgage. This program has a low down payment requirement and allows buyers to obtain down payment assistance from outside sources. Homepath can be a great option for buyers with less than perfect credit.
The process for buying real estate through banks can be more arduous than buying properties directly from property owners. Much depends on the state where properties are located, as well as bank policies.
For example, California is currently experiencing a housing shortage. Although California has experienced high rates of foreclosure banks are not releasing properties onto the market. Buyers have found it increasingly difficult to have purchase offers accepted even when submitting offers that exceed the asking price.
Nevada and Florida have excessive bank owned inventory and have been known to accept offers for less than the asking price. This is where working with a realtor can be very beneficial because they understand the market and bank policies.
One option to bypass the frustration of buying foreclosures through banks is to scout out real estate investors who specialize in wholesaling. Wholesalers purchase bank portfolios consisting of multiple properties. When investors buy in bulk they obtain reduced pricing and can pass along savings to buyers.
Locating wholesalers can be difficult because they typically do not advertise. The best way to locate this type of investor is to join online networking groups or local real estate clubs. Technically, this strategy does not involve buying real estate owned by banks because properties are owned by the wholesaler. However, savings can be greater and the process more streamlined.
Article source: http://www.appraisalarticles.com/Real-Estate/3137-Tips-For-Locating-Real-Estate-Owned-by-Banks.html