Are you about to buy your first home? If so, then you may have come across houses for sale that are bank owned. What does that mean for you, and is a bank-owned property a wise investment?
Why does a property become bank owned? The reason a property will become owned by a bank is that the homeowner was not able to pay their mortgage. Sad to say, if they could not pay for something as important as a mortgage, it is unlikely they were able to spend much on the upkeep of the home. What does that mean for the person buying it? It means that you should expect to find some issues with the home. Also, when a property like this has been left empty for a while, it is common to find it filled with trash, vandalized, and stripped of anything valuable.
Is buying a bank-owned house a bad idea? Not necessarily. Very often bank owned properties are a lot cheaper, so if the house is in an area, you like and within your budget, it could turn out to be a great investment. Of course, you need some guarantees before committing yourself to this type of property. One way to get an idea of the state of the place is with a thorough home inspection. Sometimes a realtor will try to dissuade someone from spending the money to have a bank-owned property inspected seeing as you buy the place as is, but isn’t it better to know before you buy it how much money you will need, to fix it up?
So, a bank-owned property can be a great choice if you have a tight budget – just make sure you get it inspected first.
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