F.A.Q.’s

Q. Is "bank owned" the same as "foreclosure"?

A. The bank owned property has gone beyond the normal 6 month redemption period following a foreclosure auction or "sheriff’s sale". All negotiations are with the bank representatives at this point.

Q. Why is it to my advantage to purchase a bank owned property?

A. It’s simple economics. The bank owns the property but doesn’t want to own the property. In fact, it has become a depreciating liability for the bank, and as time goes on, becomes a bigger and bigger loss. The bank wants the property off the books, which opens the door of opportunity for you, the investor. There is no emotion involved on the part of the bank, and the process is very predictable.

Q. Are all bank owned properties in need of rehabilitation?

A. While many homes and condos have been neglected for a prolonged period of time, you will find that many of these homes are actually in very good condition. Some very good people lived in these properties, and many left them in a state of repair that evidenced a sense of pride.

Q. Is there money to be made investing in bank owned homes?

A. Even in this market, if you buy it right, you can re-sell it at a profit or rent it out for positive cash flow. Bank owned properties can be purchased 10-50% under market value.

Q. How do I locate the bank owned properties?

A. The Bank Owned Property Tour Team will do the research for you. We will provide you with the absolute best bank owned bargains to choose from.

Q. What information should I be looking for?

A. Several things come into play. At the very least you will want to know the amount of time on the market, the price that the bank purchased it for at auction, the amount of time since the last price reduction, re-adjusted tax figures, recent comparable sales data, any known defects, upcoming assessments and info on any recent offers that the bank rejected. The Bank Owned Property Tour Team will provide you with all of the above and more.

Q. What will I need to get started?

A. First and foremost, you will need a mortgage approval, or at the very least, a mortgage pre-approval. Our mortgage partner, Cambridge Mortgage will provide you with a firm mortgage commitment, so you can shop with confidence. Please be advised that the banks will not even look at your offer unless you are pre-approved. You will need a sufficient earnest money deposit (usually at least $1,000.00) to submit an offer. Once we know the type of home you are searching for, the Bank Owned Property Tour Team will go to work to find it for you, and then proceed to walk you through the entire process.

Q. What about HUD or VA owned properties?

A. The purchase procedure is a bit different for HUD and VA properties. These homes can only be purchased via an online bidding process, initiated by a licensed real estate brokerage such as our company, CENTURY 21 Town & Country. You can view the HUD/VA inventory at www.Homesales.gov. If your bid is accepted, we will be notified via e-mail. There is a minimum $500.00 deposit required for HUD properties. VA homes can be purchased if you qualify for a VA loan, with as little as $100.00 deposit.

Q. What if I have a home to sell first?

A. Contact the Bank Owned Property Tour Team to assist you in getting it sold. The banks will not accept an offer that is subject to the sale of another home.

Q. How long do I have to own the property before I can re-sell it?

A. As long as your mortgage does not contain a pre-payment penalty for paying off the mortgage before the pre-designated time frame, you will have the luxury of deciding if and when you would like to turn your investment into profit. Consult your tax expert to discuss how capital gains may affect you. You may also want to consider selling your investment through a 1031 tax-deferred exchange, whereby your profits can be transferred, tax-free into another similar investment. Once again, we recommend you seek the consultation of your tax expert or financial advisor.

Q. What else should I know about buying a bank owned property?

A. Patience is a virtue. Negotiating with the bank representatives can often be a very slow moving process. In many cases the home you are bidding on is one of several hundred files on the desk of an overworked asset manager. Be prepared for a response time of up to a week (or more). You’ll have many questions along the way, and our team will be here to get them all answered. Feel free to contact us at any time for additional questions that you may have.

Hud/VA Owned Homes

www.Homesales.gov