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What to know before buying a bank-owned house

On Behalf of | May 30, 2019 | Firm News

You have spent months, maybe years, looking for your dream home. You finally find the perfect house in your ideal neighborhood in Franklin. Yet, there is a catch: the bank owns the home. How does this change the process to purchase the home?

Buying bank-owned property is not appealing to everyone. While the process differs from purchasing a regular home, heading into the process with some expectations and knowledge about what is to come can help prepare you for a unique buying process.

Understand what to expect

According to The Balance, when you purchase a home regularly, you can ideally talk to the seller about potential issues or other details in the home, such as whether the basement is prone to flooding, when the roof was last inspected and more. You can get a good feel for the condition of the home based on interactions with those living there.

In the process to purchase a foreclosed home, this level of intimacy is gone. The bank or lender has overtaken the home and generally will not supply such knowledge. Additionally, understand that the home will more than likely be sold as is. You will likely be unable to request a repair or inspection prior to buying the home, unlike a normal buying process where such items may be subject to negotiation.

Anticipating the buying process

If you have your heart set on a foreclosed Massachusetts home, keep the following considerations in mind:

  • Hire a professional to inspect the home. While the inspection may come out of your own pocket, being aware of any serious issues prior to committing to the home can be insightful.
  • Double-check any title issues. Avoid potential outstanding title issues by searching public records and hiring a title company to conduct a comprehensive search.
  • Retain a preapproval letter. Foreclosed properties can sell quickly. Having a detailed preapproval letter from your lender on hand can give you a competitive advantage.
  • Make an educated but competitive offer. Do your research on the sale prices of other comparable homes and act swiftly if necessary to make a competitive offer.

Bankrate describes the process to purchase a foreclosed home well: risky but also rewarding. The buying process can be quick and repairs to the home can add up. However, doing all you can to prepare and working with the right professionals can ultimately lead you to the purchase of your dream home.