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Buying or Selling a Home/purchasing a bank owned property

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Expert: - 9/17/2007


Question
First, I would like to say thank-you for your time. I am currently trying to purchase a bank owned property before it goes on the market. The reason I'm in such a haste to purchase it is because I assume if it goes on the market, the bank will try to sell it for market value. My question is can a bank collect more money than the loan amount is? And if not, what happens to the excess money if there is no other junior liens on the property.

Carey
Chattanooga, TN

Answer
Hey Carey,

Thanks for the question.  You are correct, once the property is REO "bank owned", the lender/owner will list the property at market value for the "as-is" condition.  REO homes are usually a little beat up, so they price the home accordingly.

To answer your specific question, yes the bank can collect more than the defaulted loan amount was for.  In essence, they are allowed to make a profit.

Good luck getting the property!

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Jay Denit

Expertise

I'm a Real Estate Broker/Loan Consultant in the state of Colorado. We have a separate foreclosure investing company, so I'm more than willing to answer any Colorado foreclosure questions for both the home owner and investor. I have sold bank owned homes all across the country for all of the big banks. I'd be happy to answer any questions about buying or selling residential homes and specialize in luxury estates. Furthermore, I have some experience in land acquisition and development and know a touch about water rights. We are a licensed lender in most states, so I can answer general questions about all types of mortgages.

Experience

My experience is really anything that has to do with real estate. From buying and selling to investing and foreclosure, I’ve done it all. Being able to handle the acquisition and financing under one roof gives me the intimate knowledge of all facets of property conveyance. My foreclosure/bank owned property (REO) experience gives me the problem solving mindset to always find a solution.

Organizations
BARA- Boulder Association of Realtors NAR- National Association of Realtors CAR- Colorado Association of Realtors

Education/Credentials
Xavier University-- BSBA Finance Colorado State University-- Professional Certificate in Project Management

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