Buying Your Home From The Bank: What To Know

Bank-owned homes can offer buyers a great opportunity, but they can also come with issues. If a bank property interests you, read on for what to know.

A Few Problems to Contend With

Overall, bank properties can be beneficial for buyers, but they need to know about the following precautions first:

Given that these homes were likely abandoned by the previous owners, they might have sat empty for a time. That means you can expect them to possibly suffer from these issues:

  • Vandalism — In some cases, vandals will have defaced the walls, but some homes in remote areas could have been left open to the elements, suffered from broken windows, and more.
  • Thievery — Homes that might have had appliances and an HVAC system may now have none of those things.
  • Squatters — The homeless may have taken residence and they might not have been good housekeepers.
  • Neglect — Homes that are empty may also be missing regular pest inspections and treatment, lawn care, pool care, tree maintenance, and more.

Some banks do a good job of making the homes up for sale habitable again. It's on the buyer to ensure that the home is clean and ready to occupy, though.

Several Benefits to Bank Homes

Homes offered up for sale by the bank that foreclosed on the previous owner may come with a bit of a bonus — financing. The lender owns the property and may be incentivized to offer financing for it as well. You should be free to finance it how you wish, however, if you find a better financing deal.

Part of the home-buying process, eventually, is to have a title search run so that clear title can be assured. With a bank property, problematic titles are not as likely since the bank holds the title, and any liens or encumbrances are likely to be paid off before it's ever offered for sale. Normally, a seller could have liens on a home and not realize it until the new prospective buyer went to purchase the home. When the seller owes money to a creditor, a lien might have been placed on the home. To buy the home, that lien must be satisfied first.

Many bank-owned homes were defaults on government-backed mortgages. When that occurs, new buyers have the potential to inherit or assume the existing mortgage. These mortgages are often offered at a lower interest rate and can come with cash out to make improvements on the home.

Lender-owned properties can be handled by any real estate agent so speak to one today about this convenient option for buying a home.

For more information about buying this type of real estate, contact a local agent.