9 Steps to Buying Bank Owned Foreclosure Bargains and Banking Huge Profits

There are three different ways to get involved in foreclosure investing and today I will cover buying a post auction property, also known as a bank-owned property. So below I have broken down purchasing bank owned foreclosures down into a 9 Step program.

Step 1: Get pre-approved for a mortgage and make sure you have your down payment money together.

Step 2: Use the internet or home magazines to find good deals, but the number one way is to find a real estate agent who specializes in bank-owned properties. They’ll have access to dozens or hundreds of bank-owned listings.

Step 3: Meet with the real estate agent and discuss your goals and begin viewing homes that meet your criteria.

Step 4: Find a property and have the agent submit an offer to the bank for your target bargain price.

Step 5: Agree to a price and sign the purchase contract.

Step 6: Have an appraisal performed to make sure the value is supported.

Step 7: Have the lender’s closing attorney do your research for you when they do a complete title search on the property so you know all existing liens and stakeholders for the property.

Step 8: Submit the title search information, appraisal and final documentation to your new lender and attend the closing.

Step 9: Move in and customize or renovate the home for yourself or find a tenant to rent the property out to.

Pros of Buying Bank-Owned Properties

Less stress because the bank has done the nitty-gritty work for you. No dealing with stressed out sellers or stuff like that. The property is in better condition because the bank brought it up to sellable condition. Banks are motivated to sell at a discount because they don’t want to be a property manager. You actually get to go inside the house and preview it and have it inspected. All the liens and back taxes have been removed. You can negotiate on rehab costs, interest, closing points, and loan amount instead of being locked horn to horn with a seller.
Cons of Buying Bank-Owned Properties

You’re dealing with a bank so they move at their own pace. Banks want things done a certain way or they won’t accept your offer. You probably won’t hit the super long homerun that you read about in all the real estate investing books. You’ll get a good deal, but probably not the steal of the century. Other than that there really aren’t that many negatives to buying a bank-owned property. The hard work has already been done for you in most cases.

By: Christoper Rivers