Is Buying Bank Owned Real Estate a Safe Investment?

Buying bank owned real estate has become a popular choice amongst first time home buyers, real estate investors, and individuals seeking reduced priced properties. Bank owned foreclosures are sold directly through bank loss mitigation or their assigned independent real estate agents. Many properties are priced at 20- to 40-percent below market value.

Buying bank owned real estate not only saves buyers money, but can also reduce the amount of time searching for the perfect home. Bank foreclosures often make exceptional personal residences and investment properties.

With thousands of foreclosed homes on the market working with a foreclosure specialist can help buyers locate houses in specific areas and price ranges suited for their budget.

Bank foreclosures consist of all types of properties. Whether looking for single family residences, multi-unit homes, raw land, or commercial real estate, chances are you can find exactly what you need through realtor foreclosure lists.

Purchasing real estate foreclosures isn't much different than buying other types of properties. When bank owned homes are sold through bank loss mitigation, buyers submit offers directly to the servicing lender. If foreclosed real estate is listed through realtors, buyers submit proposals to agents who pass them along to lenders.

It is important to note that real estate owned by banks rarely offers room for price negotiation. Mortgage lenders have already incurred substantial financial loss from the foreclosure process. In addition to repossession costs, banks enter into negotiation with creditors and tax collectors if liens or judgments are attached to the property. All properties sold through banks have a clean title which saves buyers time, money and frustration.

Bank owned real estate is simply foreclosure properties that did not sell through public auction. Properties are sold in as-is condition and buyers are responsible for repairs and renovation costs. Prices of REO properties are reduced to accommodate repairs and borrowers can apply for additional funds to finance necessary work.

Buyers should engage in due diligence and obtain property appraisals and home inspections prior to presenting offers. If inspections reveal additional problems, buyers should obtain written repair estimates which can be used to negotiate the asking price.

The majority of mortgage lenders require buyers to obtain preapproved financing prior to presenting offers on bank owned foreclosure real estate. One good source for buying bank owned real estate with flexible financing terms is Home Path Mortgage.

Offered through Fannie Mae, Home Path offers deeply discounted foreclosure real estate. Many properties qualify for HUDs Neighborhood Stabilization Program which provides grant money to buyers willing to rehab properties located in areas hit hard by foreclosure.

Home Path Mortgage offers flexible mortgage terms, low down payment requirements, and the option to obtain down payment assistance from outside sources. Information about the program, along with listings of available properties can be found at www.HomePath.com.

Buying bank owned real estate can help buyers purchase a home and obtain instant home equity. Although most properties require some TLC, they can easily be transformed so their original luster shines through and provide a residence where life-long memories can be formed.