There are many bank owned properties for sale in the Colorado Springs area and many home buyers are looking for a bargain. Bank owned properties are generally listed below market value but that is not always the case. In other words, just because a property is bank owned, don’t assume it is a bargain!
There are numerous factors to consider when purchasing a bank owned property:
1. Financing– Most bank owned properties offer Cash or Conventional financing but do not offer other terms including FHA or VA financing. If a buyer wants to finance their loan for a bank owned home through FHA or VA, they may run into a snag when the property is being inspected or appraised. FHA may only finance the loan under certain conditions (i.e. the furnace or water heater being in working condition). VA appraisers inspect the property to ensure that it is safe (i.e. foundation, interior, and exterior) and if the property is deemed unsafe, obtaining VA financing may be difficult or impossible. Banks will often sell their properties “as-is” and will not be willing to make repairs for the buyer even if it is conditional on the FHA or VA loan being approved.
2. Homeowner’s Insurance– If you decide to purchase a home and there is a pre-existing problem (i.e. damaged roof), the insurance company may not be willing to insure your home unless the problem is repaired within 30 days after obtaining property insurance. If an issue arises during the inspection of a bank owned property you are going purchase, contact your homeowner’s insurance to find out what is covered in your policy and if you can file a claim relating to pre-existing problems with the home.
3. Sold As-Is- Don’t plan on asking the bank to making any repairs because most bank owned properties are sold as-is. The inspection is usually for informational purposes only and the buyer needs to assess the cost of necessary repairs when purchasing a bank owned property in Colorado Springs. The bank normally allows the buyer 5-7 days to obtain an inspection.
Patricia Beck – Selling Colorado Springs Homes