You have decided to make an investment in a home owned by a bank. Do you know where to look for ads? Getting a property from a bank can be a very good decision, but you should make sure that you have done your research on the property and that you feel comfortable, especially if you are going to live in it yourself.
A house owned by a bank is also called an REO property. This is a property that has been repossessed and could not be sold through auction. So now the bank that had the original mortgage owns the property and they are trying to get rid of it. Keep in mind that banks do not want to be in the real estate business. Many banks have websites that list all of their bank-owned home investments. To arrive at a sales price, the bank that owns the note will add up the expenses it incurred to obtain the property, the remaining amount of the primary mortgage, and any secondary liens. Depending on the circumstances, it could be well below market value.
Before you spend your hard-earned money, find out about the house. Why wasn’t it sold at auction? It’s easier to do an in-depth inspection once a property becomes a bank-owned home investment. Be sure to do this with someone who knows about home repair. You want to have a good idea of what it will cost you to get the property to the point where you can resell it, rent it out, or live in it. Add up your potential expenses and calculate the price of the property. Many banks now use third-party real estate agents to close deals, so you won’t have to deal with a banker who has limited knowledge of the home and the surrounding market.