If you are in the market for a single-family home, you have various options to consider such as bank-owned property. Homes that have been recovered by the lender may have a negative connotation but they can also be great bargains for buyers. To find out about the benefits of buying a bank-owned property, read on.
1. Good Condition
When you consider a home that has been empty for some time, you can expect at least a few problems. With no one taking care of the home, repairs go waiting and small issues can turn into major ones. In addition, vacant properties can fall victim to squatting, vandals, and theft. With a bank-owned property, though, those things are not as likely. Banks will usually have the lawns cut and the home will be clean and ready for occupancy.
2. Built-in Lending
Another big benefit of pursuing a bank-owned property is the financing situation. Banks don't enjoy holding on to properties for long and they may offer to not only sell you a home but finance it too. Other possible perks include low-interest rates, special financing plans for sub-prime borrowers, a quicker closing process, etc.
3. Lien-free Homes
Distressed homes could come with an unwelcome bonus: liens. A lien may be placed on the home when the owner fails to pay their bills on time. For example, if the owner owes a medical facility thousands of dollars, the facility may take the owner to court. The court will rule in favor of the medical facility and impose a lien on the home of the debtor. In normal circumstances, the buyer of the home will need to pay off the liens before the home closes. Bank-owned homes, however, are placed on the market free of liens or any other encumbrances.
4. Government-backed Loans
Some loan defaults fall into the Federal Housing Administration (FHA), United States Department of Agriculture (USDA), or Veterans Administration (VA) category. When that happens, the Housing and Urban Development (HUD) agency is in charge of selling the homes. Going this route can mean the buyer can get cash with the loan to make any needed repairs on the home.
You can locate bank-owned homes in some of the same places that all homes are listed, such as newspapers, online real estate sites, etc. In addition, speak to your real estate agent about bank-owned homes since they often know about them before they are listed.