Whether you call them Bank Owned Houses or Lender Owned Houses, you are referring to homes that have gone through foreclosure and a trustee’s sale at the front steps of the county court house. Most bank owned homes end up being sold through the MLS via a real estate broker representing the bank.
Buying a Bank Owned house is similar to purchasing real estate from a traditional seller. The biggest difference between buying a house from a traditional seller and buying one from a bank is the type of deed you will get from the seller. Banks typically sell their homes and transfer title under a Special Warranty Deed and a traditional seller would convey the home’s title under a General Warranty Deed. The difference between a general warranty and special warranty deeds is that the special warranty deed only applies to elements of the home that changed or remained the same while the owner (bank) owned the property. A General Warranty Deed transfers title with certain warranties (promises) made by the seller.
A few other differences between a traditional home sale and Bank Owned sale:
* Banks have never occupied a home. Therefore, in most cases you will not get a complete seller property disclosure from the bank.
*Also due to the fact that the selling bank has not occupied the home, you will not receive an insurance claims history. (Often referred to as a CLUE report)
* Things can take longer. Banks take longer to communicate regarding contractual needs. For example, a traditional seller may respond to an offer in 24 to 48 hours. Many banks take up to five days or longer to respond.
*A positive of buying a bank owned house: bank owned homes typically sell for less than traditionally sold homes.
If you need assistance with purchasing a bank owned home just let us know at Arizona’s Family Team. We are experts and always ready to help.