Foreclosures
Banks are driven by numbers. Their non-performing assets do not generate income, they require reserves to be set aside in addition to the loan amount and large numbers of non-performing assets do not look good on the bottom line. So, if the financial institution doesn't really want to be carrying these properties, why don't they sell it cheap? First, if a bank has a large portfolio of bad loans and they do not want to carry them on their books, they sell the loans as a portfolio at a discounted price to companies in that business. Second, if they have taken a property back and now own it, why wouldn't they want to get as much as they can for it? It's called cutting your losses. If you want to buy from a bank, find properties you might be interested in by either following the auction sales or using a service that gives you fresh REO information. Fresh information will allow you to put an offer into the bank before they will have any additional costs in the property and will be more likely to cut a deal. Your best opportunities are going to be properties that need a lot of work, have something wrong with them, or that are in a slower moving market. Banks seem to take forever to respond, place an offer with limited acceptance period, wait out that period, then go on to other things. Placing an offer at 60% of market value is something that probably won't fly. Be realistic about the property, your requirements and the bank's position and an offer just might be accepted. Another possibility is to look for the dogs. Properties that have been on the market for a long time either are overpriced, are ugly or have some other problem. If you feel these problems can be overcome, a bank just might be willing to sell at a reduced price. |
