Draw Backs To Buying Bank Owned Homes?
What do I need to know before buying a house from the bank?
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Foreclosed Homes
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1) It may take a while for the bank to respond to your offer.
2) The property is sold “as is,” so you had better spend the money for a thorough inspection before you close (and make your contract contingent upon a favorable inspection).
3) When the inspection reveals problems, the bank is not going to want to pay for them.
4) Many of these properties have condition issues.
5) Some of these properties may have people living in them against whom you will have to start eviction proceedings (be especially aware of this if you are buying at auction).
6) If you are buying at auction, you must always check for tax liens before you bid. I know a guy who got a $60k surprise as a reward for not checking.
This list is by no means exhaustive, but it should get you thinking.
Comment by Heavy Metal Music and Bands — July 13, 2009 @ 12:50 am
You buy the house based solely on your inspection and the result of any survey you commission. The Bank will have no knowledge of the house or its environment and is not in a position to answer any questions you or your solicitor may have. Such information is often available from a previous owner who has lived in the property and is familiar with it
Comment by Needy — July 13, 2009 @ 5:01 am
The bank wants a fast closing. You will lose if another offer comes in even close to yours but can close in a couple of weeks.
if property is in rough shape no way bank will accept FHA loan.
You cannot be certain of condition. Many of these homes had water damage from burst pipes. There is no way to know if mold is growing behind walls without tearing down walls. Home inspector will not look behind a wall.
These homes sell at 20% discount to market for a very good reason.
Comment by David Z — July 13, 2009 @ 6:47 am
if you know very little or nothing, the subject is so complex that you need a professional advisor in your area.
Comment by Spock (rhp) — July 13, 2009 @ 12:53 pm