Are you trying to find a bank-owned property that’s a good deal? I’m here to tell you, stop wasting your time!
Those are not deals. Here’s why.
Should You Buy Bank-Owned Properties?
I’m a real estate agent and an investor, and nothing bothers me more than people thinking all bank-owned properties are deals.
Don’t Waste Your Time With New Listings
When REO first comes on the market—a bank-owned property—you need to understand that banks are not in the business of selling what we investors would consider a deal. Initially, the bank will list the property at the max they are trying to get for the house.
Any real estate agent will tell you that houses sell for the max price if they get an offer the first 30 days they are on the market. A bank follows that same rule.
After 30 days, if there’s no offer, they may entertain a lower price—after 60, the same thing, and after 90, the same again. But there’s no reason to extend a lowball offer within the 30-day window.
Don’t Waste Your Time on “Pretty Houses”
Thoroughly look through photos of the property. If a home looks very nice—like there isn’t something seriously wrong with it—and a prospective homeowner can use an FHA loan or a regular conventional loan to buy it, their price or offer for that house will always be higher than what a cash buyer looking for a deal would offer.
If this isn’t the case, something is definitely wrong with your offer—that’s not a deal!
How to Find Bank-Owned Deals
Are bank-owned properties EVER a deal? Yes, they can be.
In order to get these deals, you need to build a relationship with REO agents. After 30, 60, 90 days, the agents who list these types of properties will alert you that now is the time to come and submit your offer. Sometimes they’ll even give you a range the bank is willing to accept.
BUT you also need to know the number that makes this work as a deal for you. So, first understand what price you need, and then see if you can strike a deal with the bank.
Watch my video above where I go into more detail about these concepts.
Any questions? Have you purchased bank-owned properties? How did it work out for you?
Leave a comment below.