About Bank Owned Properties

The purchase of a bank-owned property has the potential to result in high value at a modest price. The process is somewhat different than a conventional or short sale purchase.

The properties are typically offered “as is” with the right of inspection. Seller has little or no information about possible property defects, but permits the buyer time to make his or her own assessment. A home inspector is often hired to assist in this task.

Some banks require the use of their own purchase contract form rather than a form approved by the Florida Association of Realtors and/or the Florida Bar Association. The bank-provided forms are less encompassing with respect to many buyer-related aspects of the purchase process, and require scrutiny and possibly additional precautions  to insure the transaction is as the buyer intends.

With submission of an offer, the buyer will be required to provide a loan prequalification letter or, in the case of a cash offer, proof of funds. Banks give significant preference and weight to cash offers.

Bank-owned properties that are perceived by buyers to be “priced right” often receive multiple offers within days of listing and sell quickly at or above asking price. Banks often ask for “best and final” offers from competing buyers.

The rest of the story….

If the asking price is not perceived as providing high value, the property may remain on the market for a significant time without activity. An astute buyer, understanding the bank-owned process, may be undeterred by a high asking price, submit an offer well below asking, and have the offer accepted. While many conventional sellers have a “bottom line” price below which they will not (or cannot) sell, banks have a compelling need to get properties quickly “off their books”, thereby providing a different criteria for contract acceptance.

It is not uncommon in today’s market for conventional-sale properties to be priced comparably with bank-owned properties and should be considered in the research process. While a short sale possess a different set of parameters, they may also provide high value opportunities.

Please contact us and we would be pleased to assist you with your research, preparation for and purchase of a high value property.

Jim Green