Why Buyers Go for Bank Owned Foreclosures

Buying bank owned foreclosures does require a lot of homework, guts and patience. It is also riddled with risks, especially in the aftermath of the robo-signing scandal perpetrated by some of America’s biggest banks. Plus, there are unseen liens and judgments if buyers are not too careful about their purchases. But homebuyers are still flocking to bank owned foreclosures and other distressed properties for sale, some real estate agents say. Buyers, whether they are end-users or investors, start their search with foreclosure listings in the hopes that they would be able to spot a bargain, if there is any. The Allure of Foreclosed Properties Not all distressed properties are sold at bargain prices. Some may even be sold for more than their market value since some of the sellers of the bank owned foreclosures want to raise enough money to cover the outstanding mortgages plus taxes and other fees. Buyers also have to factor in the cost of repairing or even overhauling of the property. But some of the thrill in buying foreclosed properties is in the act of sifting through the rubble, picking out the diamond in the rough. Some who do buy properties like these to resell find satisfaction in getting a good deal for something that may not even come across when times are good. High-end or middle market properties like two-bedroom condos in the middle of the city may become a steal, if luck is on the buyers’ side, which would have been unavailable and sold at inflated prices during a market boom. The key in finding that diamond is in the timing and knowing what places were hit badly by the housing crisis. The Art of Dealing Getting discounts for bank owned foreclosures may also be possible, with the help of realtors who are experienced in buying distressed properties. Buyers with cash also have a lot of leeway in terms of getting a good price for their intended purchase, given that some foreclosures may not even qualify for loans or banks may have tightened their lending. If the bank owned foreclosures do not get sold at auctions, these properties usually go back to the lender. That is the perfect opportunity for buyers to negotiate aggressively with the sellers. They must take note that the banks do not want to hold on to these nonperforming assets forever and they want to liquidate these as soon as possible. And some buyers find that the enjoyment of wheeling and dealing with sellers and getting a good deal out of it is enough to compensate for all the hard work they have put in the search for the perfect house among the bank owned foreclosures in the market.