Great Money Saving Offers With Real Estate Foreclosures
Recession looks like it is going to be a permanent fixture around the world. Lenders are impatient for payments and if no payment is forthcoming even for some months, they resort to getting their money back by any means. Foreclosure is the easy way out with not much hassle. Banks which get their hands on such properties make an effort to effect sales proceedings. Buyers are more inclined to buy bank-owned properties than other real estate properties right now.
Who Can Buy?
Actually, purchasing properties owned by banks is an ideal way to invest. First time buyers are offered special programs in their endeavor to buy such properties. There are also such schemes for those with low credit scores. If you are a business owner who wants to expand your retail outlet, manufacturing facility, office space, warehouses or distribution centers, you will find buying bank-owned properties easy.
Method of Sale
Banks usually employ two traditional methods to sell such properties. They place advertisements and select a local realtor from the applicants and proceed with him. Some banks have their own loss mitigation people who deal with in-house sales.
Advantage Bank
Considering that the banks’ purpose is to recover as much loss as possible, the prudent way for prospective buyers is to submit the highest offer in the first instance itself. This does away “the offer and counter offer” process that you have to go through if the sale were handled by private realtors.
Damages and Repairs
Banks are not house-owners and they can hardly be expected to carry out repairs in the property. It is always “as is” sale that banks offer. You must weigh the pros and cons of buying a property which may require repairs or renovations. Herein lies a good chance for saving money. In most cases, a number of damages go unreported. If you discover some such deficiencies, you can establish a negotiation process with the bank to reduce the price.
Wholesale Purchases
Banks usually fix the price some 10% to 20% below the market price. Individual buyers, instead of buying directly from the bank, can always look for wholesalers who buy multiple properties at significantly low prices from the bank portfolios. These investors will be willing to sell the properties acquired thus at a price lower than the current market prices, sometimes for as much as 70%. They will still get their profit and the individual buyer will also come into possession by paying a low price.
Fannie Mae
The federal government has a scheme to make people without good credit record home owners. It is called Fannie Mae’s Home Path Program. In addition to the bad creditors, those who cannot afford to pay down payments, those who are looking for cheap homes and real estate owners can also clinch the deals.
Home Path Mortgage
Another program named Home Path Mortgage offers houses at a 3% down payment. Private mortgage lenders cannot be expected to assist in this manner and so, the government’s hand in lending assistance should be made use of.
Stagnant Properties
Not all properties sell soon after they are put up for sale. When a property lies stagnant, banks tend to offer the property at a lower price. Or, you may initiate negotiations with the bank on this count.
The investor should keep in touch with the market realities and government programs to make maximum use of to buy properties and save some money in the process.
Written By:
Mei Sui Ling works for high cash offer as their client management head. He takes care of their brand strategies online and campaign media spends.
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Category: Real Estate
