The return of a healthy local real estate market has meant that you don’t hear nearly as much about area bank owned homes. Back before the economic recovery had begun to take hold, the wave of foreclosures triggered a raft of local bank owned home auctions and sales. It created conditions which hadn’t been seen in living memory.
The combination of low mortgage interest rates and fire-sale prices allowed some fortunate buyers to become homeowners for the first time. In some instances, longtime renters who had been previously priced out of the market were able to take advantage of some once-in-a-lifetime bargains—to take the leap to homeownership earlier than they would have expected.
Today, although overall economic conditions have improved considerably, some sharp-eyed renters can still find the occasional bank owned home that represents the same kind of unbelievable value proposition. The foreclosure glut may be long gone, but historically low home loan interest rates remain (at least for the moment). What also remain are the cautions that any first-time buyer should be aware of—the additional factors that should be taken into account in deciding whether to purchase an area bank owned home.
The overriding factor is the condition of the property. What seems to be an unbelievably great deal may be literally too good to be true—especially if the property has not been maintained properly. Circumstances vary, but when a home’s ownership has reverted to the bank, it is often the case that the defaulting borrower has been unwilling to keep up a property which he knew he was going to lose. That can just mean that the lawn needs some TLC…or it could mean that the roof is ready to fall in!
Since bank owned homes are sold or auctioned in ‘as-is’ condition, it’s vital to do as much due diligence as possible to ascertain the true shape a bank owned home is in. This isn’t just to protect you from expensive corrections that might be needed to make the place livable. FHA loans are often a key factor in making a purchase possible at all, and to qualify for those government-backed loans, a home must be deemed to be in “saleable” condition. Broken windows, falling-down fences—even missing kitchen appliances—can delay or permanently derail a sale.
If you have been impatiently eyeing your own rising rental bills, the idea of checking into the possibility of finding a suitable town bank owned home bargain is just one possible way you might become a home owner—and sooner rather than later. The best way to find out is to go to the phone. Let’s chat!