What is a Bank Owned Home, or Foreclosure?
The term Foreclosure is used intermittently with other terms, such as Real Estate Owned (REO) and Bank Owned. A foreclosure is when the bank has taken bank the property from the homeowner. This happened after a Notice of Default, Notice of Sale and the Sale Date have been completed.
How long does a Foreclosure take?
Banks are reluctant to pursue foreclosures due the long timeframes and costly eviction process that it takes. In most cases, it takes up to a year or more to take back the property and place it for sale as a foreclosure on the market. Letting a homeowner do a short sale actually saves the bank money and keeps the home in a better condition due to the fact that someone is still living in the house and taking care of the home while negotiating with the bank.
What should I know about putting offers in on Foreclosures?
When putting in an offer on a foreclosure with your Realtor, please keep in mind that the listing agent usually has no control over accepting the offer. The listing agent is simply marketing the home and all offers are submitted to an Asset Manager representing the bank. The bank typically has a net amount of proceeds that they want to make on the property. That Asset Manager takes your offer, deducts any real estate fees and commissions to be paid and determines if the amount left over will satisfy the bank in their monetary demands.
Are Foreclosures all in the same condition?
You will notice a great contrast in looking at foreclosures. Some will be in “Move In” condition while others will almost be unbearable. The reason for this contrast is that the banks either do cosmetic and structural repairs or decide leave the home “As Is” before the property is available for sale. The decision is up to the bank and is made by weighing if a further investment of funds will lead to a higher offer.