Buying Bank Owned Property

Develop a system to keep track of properties that interest you. A good tracking system is important as most foreclosure buyers pursue many properties, sometimes over a period of several months.

When you find a property that interests you, perform some preliminary research to make sure the property represents a good bargain opportunity. Your research should not take more than one or two days because you do not want to delay too long before contacting the foreclosing bank. The key pieces of information you need to gather are the estimated market value of the property and the bank's break-even amount.

You or your real estate agent should initiate contact with the bank to express your interest in the property. Before you expend the time and effort to contact the bank, make sure you're fully prepared to buy.

Once you make contact with the bank's asset manager or REO officer, you should arrange to walk through the property (with your agent if applicable) to make sure it fits your criteria as a buyer. If both you and the bank agree to proceed, you should start negotiating the terms of the purchase agreement. A real estate agent can be a valuable resource during the negotiating process.

Once you've arrived at an agreement with the foreclosing bank, you can put the agreement in writing. You should have a local real estate agent or real estate attorney help if you're not familiar with how to draw up a purchase agreement.

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