What’s Up With Those Bank Owned Properties?
Banks are discovering that if they negotiate with the owner, it actually costs them less than if they were to go down foreclosure lane. This equals a shrinking foreclosure market.
My clients and I recently went through two separate bank owned property adventures.
Foreclosure #1: After 309 days on the market, someone else decided to put an offer on the same property, on the same Monday morning as us. Two bids: One house. Back to the drawing board to put forth our highest and best offer: best man wins. We felt the home was only good up to a certain price. So the other guy won as they bid quite a bit higher. Note: This is after a week and a half of waiting to hear back from HUD. In the meantime, other great potential properties were coming on the market.
Foreclosure #2: Great neighborhood with tons of potential. Have you heard this one before? Under appraised, walk into equity. Fortunately, we were the only bidders this time. So after 5 hours of HUD paperwork, over night fed ex packages, multiple visits to the property (de-winterize/winterize), and, atlas, the inspection it was determined that this house should have burned down months ago with hot, faulty wires secured by God knows what. Rescinded our offer. I see the equity there but this particular home screams “tear down” not “first time home buyer”.
House #3: Six days on the market, motivated sellers, and happy buyers: Pending. Set to close next month.
You can chase foreclosures all day but what buyers really want to see is a cooperative seller with a home that won’t burn down after you buy it.