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Repossessed homes are not the banks’s favorite subject. However, those houses, which in many instances are just a few years old and in good condition, can be acquired at very reasonable prices, giving the property buyer another option.
When a bank takes over a property, the administrative burden is high. It has to take over the property maintenance or make improvements to make it attractive to the markets. Financial institutions only have five years to dispose of them.
Most of the time, people prefer to save for the down payment and get a mortgage, but there are those who are interested in repossessed properties.
This is a very dynamic market, and the inventory changes all the time with prices below market value. For example, if a bank has a house on the market worth $70,000 and they only need to recover $50,000 as bad debt, then the sale price will be $50,000.
Bettina De Castro, manager of Administrative Support from Banco General says that “the customer can obtain a second home at a competitive price and can also opt for a mortgage.” The loan conditions vary depending on the property value.
There are multiple offers for each repossessed home, this means a bidding war with the highest bidder winning.
Please note that most of these properties are several years old and some will need urgent repairs. It is important to make an inspection prior to purchasing the home, to avoid nasty surprises but buying a repossessed property can be a good economic choice.