How to Purchase Bank-Owned Homes and Properties

With all of the recent foreclosures and bank-owned homes on the market today, it's a great time to get a great deal. Many of these bank-owned homes are available for an incredibly low price if you know what to do to get your hands on one. Follow these steps to get a great house at a great price!

1. Call the real estate agents and the banks in your local area. These places typically have a list of foreclosed properties and bank-owned homes in the area. You can even start your search by visiting the websites of local real estate agents and searching the Multiple Listing Service, or MLS, on their site.

2. Search through the public records. The public records are usually located at City Hall or your county's courthouse and you can find financial information about the houses that you are interested in. This is where you will find out how much is owed in back taxes and if the property or home has any liens placed against it. Many of these expenses will be tacked on to the price of the house so you will need to make room in your purchasing price for these fees.

3. Crunch the numbers. Once you have decided on a property or a few potential properties, start doing some calculations so you can get the best deal. Determine how much the bank would have to sell the property for in order to come out even. Consider any repairs that need to be done in order to bring the house to code. Then, subtract the total of these fees and costs from the home's estimated value. That will give you a good price to start at when it comes time to negotiate a deal.

4. Contact the lender that owns the home you decide on. You want to speak with someone in the asset management department, the REO department or the bank-owned homes department. The name of the department varies by bank, but make sure you speak with someone who is involved with the homes that the bank owns. Ask to make an appointment so you can take a tour of the home or property you have chosen.

5. Start the negotiations. Once you have found a home that you want to purchase, make an offer to the bank. Typically, you will be dealing with the person who you spoke with when taking a tour of the home. Don't start the negotiations too low, but keep in mind the extra fees you will need to pay for repairs, liens and back taxes. Ask to have a purchase agreement written up and make sure the contract is agreeable before signing it.

Bonus Tip: Try to find a bank or real estate company that has many foreclosed or bank-owned properties available. They will usually be more willing to give you a bargain just to get it taken off their accounting books.