Tips for Buying Bank Owned Properties

M ost people today are interested in buying bank owned properties. However, one has to learn a few tricks that come in handy during the negotiations process. With so much information floating around, it is difficult to know what is good and what is wrong. Most people have been tricked to pay a lot of money with the hope that they will make much more after the deal is done. The truth is that there is no secret formula to acquiring these properties and any person that promises you an excellent deal with little effort should be avoided. This is a major red flag and could be the best indication of scam. First things first, you need to understand the nature of the properties that are owned by the banks. Usually, these are properties that have undergone foreclosure and are now bank or mortgage company property. Bear mind that this differs from properties that are up for a foreclosure auction. When you decide to buy property during a foreclosure auction you are required to pay the loan balance and all other interests that may have accumulated during this period before you are allowed to own it. Another rule is that this payment has to be made with cash at hand since no bank transfers and related transactions are allowed. Consequently, you will receive the property as it is. It does not matter if tenants are present or if the buildings are damaged. You get the good and bad in this kind of arrangement. The mortgage company and bank are responsible for handling all matters related to taxation.They will also be responsible for evicting tenants if that is what you prefer. In addition, the bank will prepare for insurance title issuance for the final buyer at the end of the closure. In this kind of arrangement, the property may qualify for exemption from normal requirements for disclosure. Depending on the State that you are in, the bank may be exempted from providing a real estate condition report or a transfer disclosure statement. This means therefore that all details disclosing defects to buyers will not be availed. You need to decide if this is what you want before making any decisions to buy bank owned properties regardless of how good a bargain it is. [Photo: flickr.com]