Guiding New York clients through their purchase of Bank-Owned Property
For savvy real estate investors, corporate acquisition specialists, brokers, agents, and buyers, bank owned properties, also known as REOs, are some of the most desirable real estate properties available on the market. Many REOs come with better deals, better returns, and less competition. Bank owned properties are still readily available. Across the state of New York, there are countless bank-owned properties ready for the taking. Buying a bank owned property can be a good step for some, and knowing more about REOs is in your best interest. If you need an attorney to offer knowledgeable legal advice or represent your legal needs while engaging with banks, contact Marc Scollar, Attorney at Law for an initial consultation.
What is a bank owned property?
When a borrower becomes delinquent and defaults on payments, a property may become a bank owned property. Simply put, a bank will “repossess” a property. Most REOs are because of late monthly payments or other missed deadlines. Lenders, banks, credit unions, and servicers may also seek to reclaim the property if it is necessary. There are generally three ways in which a property can become bank-owned:
- Deed-in-lieu of foreclosure
Purchasing and negotiating a bank owned property
Purchasing bank owned property is similar to purchasing any other real estate. You will find a bank with REOs, find a property you are interested in, make an offer, negotiate, sign a contract, complete your due diligence and close. Most banks will demand that you purchase the property “as is.” Though many believe that you cannot negotiate with banks, this is just not the case. With proof of funds or a pre-approval letter for a mortgage, you can negotiate:
- Who is responsible for which costs
- Right to inspect the property
- Closing date
Price is one of the easiest factors to negotiate when purchasing bank owned property. Though the bank generally knows how much the property is worth through their assessment called a broker’s price opinion, you can justify your offer based on many factors, including:
- Property conditions
- The local market
- Comparable sales
- Pending foreclosures unknown to the bank
In addition, proving yourself as the most reliable and easiest buyer to work with may award you with deeper savings. Through establishing an ongoing relationship buying multiple properties with the same bank, it is not uncommon for clients to see savings of up to 30% when negotiating. It is important to consult with an attorney to forge lasting relationships with lenders who are looking for an easy transaction.
Contact a Staten Island real estate attorney to guide you through purchasing REOs
Marc Scollar, Esq. is honored to serve New York clients who choose to engage in REO acquisitions. Whether you are a real estate investor or an individual property buyer, you should consult with an attorney about the process ahead. Dealing with a bank when purchasing property needs the guidance of a knowledgeable and effective attorney. If you need a law firm to offer you legal advice or fully represent your needs through the process of purchasing a bank owned property, contact Marc Scollar, Attorney at Law.