A bank-owned foreclosure – commonly called a REO (bank lingo for “real estate owned”) – is a property that the lender now owns because the person who previously held the mortgage didn’t pay it… and nobody bid on it when it was going into foreclosure.
Banks don’t really want these properties.
After all, what’s a bank going to do with a house?
As a result, lenders often turn around and sell these homes for less than what they’re worth compared to other, similar sales in the same area.
How to Buy a Bank-Owned Foreclosure
Ideally, you’ll be working with a buyer’s agent whose main goal in life is to help you buy a bank-owned foreclosure that really meets your needs.
Remember, a buyer’s agent:
- Has a fiduciary responsibility to protect and promote your interests
- Does not represent the seller and only represents you, as the buyer in the transaction
- Earns money when the seller pays commission (in this case, it’s the lender that owns the home)
Can You Negotiate With a Bank?
It’s almost always a good idea to try to negotiate. In many foreclosures, though, lenders may be unwilling to vary much from their asking price; that’s because they’re trying to recoup their losses and prevent themselves from losing even more.
However, as any experienced Realtor® can tell you, you might have more leverage if the home has been on the market for a month (or more). If the bank doesn’t accept your offer, your Realtor might advise you to wait another month and resubmit your original offer (just cross off the date and write in the new one).
The bank might ask you to submit a loan application, but you’re not under any obligation to get your mortgage from that bank. You can use any bank you’d like to use.
Are You Looking for Foreclosures for Sale in Tampa or its Suburbs?
If you’re thinking about moving to Tampa, check out the links below to search for homes with just one click:
Call us at 727-584-8480 or 813-961-6000. If it’s easier, get in touch with us online. We’ll begin searching for your new home right away.