How to make informed decisions to purchase bank owned properties Houston
Sometimes, your dream home may lie in one of the bank owned properties Houston. Have you ever thought of that? It is true that many people turn their interest towards bank owned properties because they feel it gives them a chance to buy affordable properties. While it is true that you do get to buy cheap properties during foreclosure, it is important to be well-informed about what you are getting into. This will prevent troubles in the future.
The difference
The basic difference is that buying a foreclosed property is so different from getting a traditional home. You actually have to get out and get your hands dirty to collect all the details about the property, because there is no one else to hold your hand over it.
In a traditional home purchase, everything will be handed over to you in a platter. The other noted difference is that you are buying a home in as-is condition. So you really have to shell a few dollars to get the home in a good live condition because there is no guarantee that the previous owners might have left in pristine condition. And the banks are not obligated to renovate the home or do any repairs before selling it.
Banks need to see the mortgage pre-approval letter
It is true that banks need to sell the property as soon as possible to recover the expenses. But they will not consider a buyer who does not have mortgage pre-approval letter from the bank’s chosen lender. This could take two weeks or more. Anyway, it is always ideal to have a lawyer go through the bank documents (also known as addendum) so you know what you are getting into.
Bank-owned properties are also called REOs, or Real estate owned properties. And there are two main benefits to owning one:
- A) If there are two lenders to the property, chances are that the second lender may not even foreclose. If the second lender does not commence its foreclosure proceedings and make up the back payments to the other lender, then he could get wiped out in the entire foreclosure dealings.
- B) Banks might not want to sit on inventories. And if they failed to get a minimum bid from an interested home buyer during foreclosure, then the bank will be forced to price the REO home for less, as their focus would then be on recovering the lost amount.
Hiring REO listing agents
If you are looking for foreclosed properties, then contacting an REO listing agent would be a good move. These agents work exclusively for foreclosure properties and do not sell any other property. And in a normal procedure, the listing agent would give discounts to the banks for giving them business. REO listing agents sometimes function as dual agents, i.e. they work for both the buyer and the seller.
Conclusion
Being correctly informed might just put you in the path to secure a good home and a good investment portfolio. So make sure you have all the cards in hand before venturing out.