A property becomes bank-owned when a home owner defaults on their mortgage payments and the lender takes possession of the home to recover the debt owed by selling the property, oftentimes at a very good price for the buyer. This is because the bank wants to sell the property quickly. A vacant home becomes a bad investment for the bank.
How do I contact the lender of a bank-owned property?
If you're interested in purchasing bank properties, you can contact the lender directly and ask for the Real Estate Owned or Asset Management Department to learn how you can view the property and even make an offer. Keep in mind, however, that directly contacting the lender can sometimes be a frustrating experience. Their job is to loan money, not to sell houses.
How do I make an offer on a bank-owned property?
- First of all, your real estate agent could conduct a title search to be sure there are no liens on the title, making your offer contingent on the results of the title search.
- Next, you'll want to view the property. If that is not possible, try to see pictures or find out if the lender has made any repairs to the property, such as painting, new appliances, new carpets, etc. Or will the property be sold as is? If so, keep in mind that the lender may very well accept an offer that is below the market value.
Make an offer either through your real estate agent or at auction. The latter can usually be done online, making the process very simple.
Although there is no set time frame in which a lender must sell the bank-owned property, their goal is to sell it as quickly as possible once the redemption period for the homeowner to buy back the property has passed. Therefore, if you find a bank-owned property you want to buy, don't waste anytime making your offer.