What is Bank-Owned Property?
Bank-owned homes are properties that are taken into a bank’s inventory after a
sale by foreclosure. A bank-owned property is foreclosed by a financial institution when a homeowner can’t afford their mortgage payments. These properties are usually sold at a reduced price, much lower than current market prices. A bank-owned property may also be connected to a real estate owned property and abbreviated as an REO property. Lenders and banks with the most significant bid in a foreclosure win the titles to obtain the property. Bank-
owned properties tend to have low-interest rates and low down payments. They can be discovered through online services such as RealtyTrac, or directly through lenders. Large national lending institutions have departments called loss mitigation departments that sell these properties.
Once a home is sold to the bank, the bank usually clears the indication. The bank may then make any necessary repairs to the property, and it can be re-listed for sale with a real estate company that specializes in foreclosures or with a general real estate company for sale. When buying a foreclosed property, it is reasonable to make sure the title is clear before continuing with any financial aspects of developing or managing the property.