Why consider bank owned real estate?
Generally, when getting ready to buy a new home, you find one like and then deal with the existing owner and his realtor to come to terms, then a bank to get financing and make the purchase. What if that owner happens to be a bank? Since the real estate market took a downward turn several years ago, there are a lot of bank owned homes, or bank owned real estate, on the market. These homes may have been repossessed, maybe not, but they are now in possession of a financial institution. There are definitely advantages to buying bank-owned real estate.
For one thing, dealing directly with a bank may reduce the purchase price. Banks have an interest in reducing their inventory of properties that aren’t generating mortgage income for the bank, so they are eager to sell. They are also cutting out some layers of “red tape,” which helps keep the price lower. Some bank owned properties, like the one at 10 Edgewater Drive in Coral Gables, are absolute steals!
$7.9 million may not sound like a steal, but for an 11,000 square foot penthouse in one of Miami Florida’s most desirable ZIP Codes, with spectacular unobstructed water views and a great view of the Miami skyline, custom appointments throughout including coffered ceilings, hand-crafted cabinetry, exquisite fixtures and chandeliers, expansive walls of glass, soaring ceilings, a grand master suite, a gourmet kitchen, home theater, handsome library with built-ins and inlaid wood floors, and 3000 SF of terraces with endless views? Yes! That’s definitely below the market value for such an incredible property in that location – and that’s key: don’t just assume a bank owned home is a great deal. Check the surrounding area for comparable properties at market value to investigate your potential savings.
Bank-owned properties are often less hassle than dealing with individual homeowners. You’re dealing with professionals who don’t have emotional attachments to the property or unrealistic expectations. Bank owned real estate doesn’t come with back taxes or liens, tenants who need to be dealt with or other unpleasant surprises like titles that aren’t free and clear.
That said, because you are dealing with real estate professionals, it’s crucial to make sure that you have a great professional on your side; at this time, a good realtor is your best asset!