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Sorry, You Can’t Buy Direct from the Bank

Shortsale2 wide Sorry, You Can’t Buy Direct from the Bank

Skip all the middle men and buy that house direct from the bank! But North Windham, Connecticut Realtor® Minna Reid says that there are no easy shortcuts to buying a bank-owned property.

“At least a few times a month I get a call that goes something like this:

‘I found a house about to go into foreclosure. I also found out that XYZ Bank has the loan on the house. I want to buy this house from the bank. Can you help me?’

Sorry folks, but the truth is that it just doesn’t work that way. You have a few chances to buy a home going into foreclosure. Buying ‘direct’ from the bank is almost never one of them.

Before the foreclosure, the home is owned by the sellers. No matter how far behind they are, until the foreclosure is complete, they are the rightful owners of the house and are the only ones who can sell the house to you. The owners will have to want to sell the house to you, and if lender approval is necessary (as in a short sale ), you will also need the owner’s permission and agreement to get the approval from the lender. There is no by-passing the system.

You may have an opportunity to purchase the home on the law day. This is recommended for those who have heavy risk tolerance and know exactly what they are doing. However, most foreclosures nowadays here in Connecticut do not involve an auction anyway, but are strict foreclosures. In a strict foreclosure the house just conveys back to the lender (due to heavy negative equity) .

After the foreclosure, the house becomes bank owned. Most of the time, the bank will go through their pre-listing process and eventually the house will go on market, available to the public, listed with a Realtor. Don’t waste your time trying to buy direct from the lender prior. There is no secret department you can call that will sell you the house for 25 cents on the dollar to take the house off the banks hands before it gets listed. The bank also wants market value for the property. Once the home gets listed, you may buy the property like any other listed property.

Despite the claims of late night infomercials, those selling ‘get rich quick’ systems, pay subscription sites selling subscriptions and whatever your well intended friends and co-workers may tell you, this is the way foreclosure sales work.  If you really want to buy a short sale or bank-owned home, your best bet is simple - get yourself a knowledgable buyers agent…”

 

Click here to read more blog posts by Minna Reid.

 

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