How to Negotiate the Best Possible Deal to Buy “Bank” Foreclosures?
Bank Foreclosed Homes are subject to negotiation
Commercial banks, credit unions, and other mortgage-financing financial institutions repossess homes (REPOs) as a result of non-payment of mortgage loans. Bank-foreclosed real estate properties are called Real Estate Owned (REO) or Other Real Estate Owned (OREO) and their foreclosure sales are handled by REO units. Some banks assign sales to professional real estate agents or mortgage brokers.
No matter how bank-owned homes are sold, you, as a real estate investor or home b to collect deposits and extend loans. Second, the primary intention of the bank is to recover its loan, including its principal and accumulated interest buyer get a significant discount. The reason is simple: in principle, banks do not want to deal with real estate buying and selling business. Their primary business, in general, is to deal with collecting deposits and lending money.
Bank foreclosures offer great opportunities especially after the financial crises caused by insolvency of many banks as banks are more willing to get rid of real estate properties tying their liquid funds to non-liquid real estate properties.
Banks and mortgage lenders own more than one million foreclosed real estate properties as of this moment!
Banks desperately want to get these properties off their non-liquid assets. They have to reduce the prices as there aren’t enough buyers.
Buying directly from the banks is the shortest way of acquiring foreclosure home. You don’t need to go into the details and complexity of pre-foreclosure, short sale and foreclosure auction
As a real estate investor, you are welcomed to negotiate the best possible terms with the real estate owned (or REO) department of a bank or lender.
Banks are in hurry to get rid of homes that they had to foreclose!
Each Real Estate Owned (REO) is an empty house. It does not produce any single dollar, but cost money for the bank to maintain, protect and pay the bills.
Ability of the bank to extend loans and earn interest on such loans is restricted by the total amount of such foreclosed properties. Furthermore, banks must show this total value as non-performing assets on their balance sheets. Too bad for them!
Federal and state bank supervisory agencies become alerted as such non-performing assets reach a threshold volume. Capital reserves of the banks show their strength or weakness. Banks in such a situation start borrowing from the Federal Reserve Bank and pay interest on it. And, there is a limit on such borrowing from the Federal Reserve Bank. That’s why so many banks have bankrupted or taken over by other banks.
Foreclosures listed by banks and private firms
Here’s a listing of foreclosed home by selected major banks:
- Bank of America home foreclosures
- CHASE foreclosure homes listing
- Wells Fargo Real Estate Owned (REO) foreclosure listing
- Foreclosure homes listing by J.P. Morgan
- Foreclosure homes by Chevy Chase Bank of Maryland
Some private institutions specializing in real estate have also update listing of bank foreclosures:
To learn more…
- What is bank foreclosure?
- Your negotiation power in pre-foreclosures?
- Non-monetary deals to make in pre-foreclosures?