Bloomington Minnesota Bank Owned Homes

Search Bloomington MN Bank Owned Homes / Forclosure Properties




Purchasing A Bloomington Bank Owned Property In Minnesota

In today’s Real Estate market we are seeing a lot more foreclosures and likewise there are more consumers looking for bank owned properties. With that said this brings an opportunity for those who want to profit from the large demand. You will hear from them that they have information that you can not get anywhere else. Or that they have a secret method of archiving great wealth in a short amount of time and effort. All you have to do is buy their program. The fact is that there are no effortless ways, or secret formulas. There’s just constructive dedicated hard work that’s ever paid off.


Defining What A REO Property Is

The definition of REO is “Real Estate Owned”. This is a home that has gone through the foreclosure process and now is owned by a bank or mortgage company. This is not the same as a property up for foreclosure auction. When buying a foreclosed home from auction you can expect to pay the remaining loan balance, interest and other fees accumulated during the foreclosure process. You must pay in cash and receive a “limited” warranty deed and an AS-IS disclosure. With all of that you still could end up with existing liens and even current occupants in the home that need to be evicted. An REO/Bank owned property is a much cleaner and more attractive purchase. An REO is a property that was not purchased during an auction. Now the bank takes ownership of the home. The bank now in some cases will do some clean up, repairs, remove liens, and evict occupants if necessary. The bank also prepares for an issuance of title insurance policy for the buyer to help protect from potential clouds in the title.


Are Bloomington Bank Owned Properties A Good Deal?

It is common for consumers in today’s market to think if it is bank owned it is the best deal on the market. Consumers and investors alike think it can be easy money. But in a lot of cases this just isn’t true. You have to be very careful buying a bank owned property if your intent is to turn the property to make a profit. When buying a bank owned property you have to have a market analysis done to review all the comparable properties in the area. If there are a lot of short sale homes and bank owned homes for sale in the immediate area this could affect your profit when you go to turn a profit on your investment. You also have to take into account your time and cost of products and labor to make your investment property competitive in your market. There are bargains and potential for you to profit on your investment. Many people have done very well buying foreclosed bank owned properties. But there are also bank owned properties that did not tune a profit and even at times ended up causing the investor to loose money. 


When You Are Ready To Make An Offer On An Bank Owned Property 

Typically Banks have an REO department. This is who the agent/brokerage representing the bank will be working with. This brokerage and agent will list the bank owned property on the local MLS. Before you buy a bank owned property you should hire a Real Estate agent that represents you and your best interest in the transaction. You should have your Real Estate agent find out as much upfront information as they can through the Real Estate agent representing the bank. Some things that may be important could be repair's made by the bank, when or if it was winterized in cases where the home was listed anytime during the winter season. What the banks process is for receiving offers on the property, how long do they take with an answer on an offer that has been received. How do they handle multiple offers and are you notified. During multiple offers do you have a change for highest and best? Since most bank owned properties only come with an AS-IS addendum, it is important to have an inspection contingency included in your offer. Based on the results of the inspection this could in some cases allow you to ask the bank to repair major issues that are found in the inspection or some vital code compliance issues before you are willing to purchase the property. If the bank is unwilling to resolve the issues this gives you the opportunity to cancel the purchase agreement with them. As with any offer your financial terms can make the difference in your offer being the one accepted. Working with your Real Estate agent and Lender together they can assist you in putting your best offer forward. After you have made your offer your can expect an acceptance or a counter offer. If you receive a counter offer you have the choice to accept the counter offer or counter the counter offer. This process usually involves multiple people and they could take along time to get all of the approvals needed to get your offer accepted. At times this process can take a few days to a few weeks. It is recommended that you pay very close attention to the title insurance you are being offered form the banks title insurance company. Things to watch for are: A.) If your insurance coverage has GAP insurance? Some of these title companies are taking 3-9 months or even longer to record their documents. That’s a lot of time to risk something coming up and leaving you unprotected if your policy does not have GAP insurance. B.) Does the title company have any exclusion's in there policy? Do they cover HOA liens, delinquent water bills and assessments or are they excluded on the policy? The AS-IS addendum might state after the closing that the buyer is responsible for any fee or dues including Real Estate taxes, HOA fee, water bills, and assessments that are not taken care of at closing. Be sure the title company representing the bank is working in your best interest. Don’t hesitate to ask your agent representing you any questions that may come up. Your agent representing you in the transaction is there as a resource for you.