There is a big difference between bank owned properties and FHA foreclosures that you must consider if you want to make the big investment. Government owned properties are not always as good of a deal.  The best place to buy them from are the banks.  I have gotten fast responses and large discounts from offering on FHA homes, but typically they hold out for a retail buyer and ride the market down. 

The government owns a ton of properties but the ones that have foreclosed are not going to give you as good as a deal as the homes owned by the banks. The government isn’t in a hurry to get rid of owned homes they have on their books and they won’t always budge on the price. They aren’t in the red (well, really they are but when the presses that print inflationary amounts of new monies go to them first…..really, are they ever going to be in the red?) and it doesn’t matter how many homes they have on their books.  HUD homes are the worst.  I have seen them on the market for so many months, signs in some areas plague the values as they sit, and sit waiting for some “sucker” to pay them the high price, which is often higher than retail at the time.  To me that entity is very anti-investor. 

But, in most cases, I find that government homes for sale are not below the market value and they sit and will not budge. The price is not negotiable because they don’t have to lower their price and they can wait as long as they need to in order for the home to sell. When you want to invest in this type of distressed home there is a big difference in the process and the price. There is no benefit for an investor when you look at purchasing from the government in most instances.  This I find funny, almost contradictory in a way.  The market has proven there are not enough retail buyers in the market place, we need the help of private capital, but we must motivate them from the sidelines.  Rather than tell the news and public the FED wants private capital to return, they must actually allow it to occur naturally.  Telling the media one thing while creating hurdles too high is a waste and a farce. 

Banks are the best option when you want to invest in cheap properties. This is because a bank owned property makes a bank look bad and they don’t want them. The banks want the money. The banks need to unload a foreclosure as quickly as possible. The more homes that they have on their books the harder it is for them to give more money to potential home buyers to buy another home. This is because of the risk.  Banks often tighten their purse strings and make the stipulations for qualifying for a home loan more difficult when they have a lot of bank owned properties on file.  I track the behaviors of banks by name, and the behavior of the agents that list their properties and I can also say that there are some names that act worse than FED owned.  This pricing structure is all over the board.  There are agents that price 50k over what the bank is owed, only to ride the market for 4-9 mos to recover less than the debt.  What is this type of gambling?  Since when does a bank get to flood our market with their junk inventory, then over price it to make a profit?  That is where it comes in handy knowing what bank and agent to this.  We filter every one of those into a time penalty box, track them, watch the price drops, frequency and even dates they drop.  When they are ready we send a signal it is time to our investors.   Find the right broker, find the right banks and you will find real estate profits.

Banks will negotiate with you. They will lower the price and they will make a counter offer if you come in too low. They will meet demands and work with you on the speed of the process and much more.  FHA foreclosures are a waste of time in most cases.

Rick Waible has been studying Portland, Or. bank and listing behavior in this current market for over 16 mos.  As a researcher of bank owned property, you will benefit locally by some of the studies.  For great property searches and info go to www.bludotrealty.com and search.