Nationally, the supply of the bank-owned properties for sale has been trending down -- potentially good news for anyone and everyone with an interest in Bainbridge Island real estate. Competition from the glut of foreclosed properties has had the effect of driving down home sale prices, so any drop in the number of Bainbridge Island bank owned properties will remove that downward pressure.
If the trend continues, it should also affect even the bank owned properties themselves. A drop in supply will increase competition for the bargains they represent. But this is why alert bargain hunters should keep their pencils sharpened. As retail merchants understand, just slapping a ‘SALE!’ sign on an item may help it sell -- even if it isn’t really a particularly good bargain.
The low prices attached to Bainbridge bank owned properties can represent true value…or an invitation to inherit unexpected costs. No matter how tempting a bargain may seem, taking the time and effort to uncover any hidden costs will be worth your while. Then the sharpened pencil can add the realistic costs of correction, resulting in a truly informed decision.
If a home goes into foreclosure under protest, an angry previous owner may decide to depart with essential fittings -- like bathtubs and ovens! The LA Times calculates that around $30,000 of additional costs can be added to a typical $110,000 purchase in this manner. To me, this sounds like an exaggeration, but it is a valid heads-up to investigate and factor in possible cash requirements.
An inspection by a trusted professional is highly desirable. Some bank owned properties on Bainbridge Island (as everywhere else) could carry hidden environmental issues that might later flare up into major financial drains. For example, a leaky underground tank may not only be expensive to repair -- in an extreme case a new owner might owe costs to neighbors, too. Banks do not have to disclose much of anything about the property - known or unknown – so be sure your inspector is thorough.
If the previous owner has been unable to meet the costs of other debts, the home being sold may be saddled with extra financial obligations. One example is past due real estate taxes. By the time a bank has officially foreclosed on a home, these debts will usually have been paid – but paperwork can get complicated, so title insurance becomes extra important when buying a bank owned home.
An experienced agent will watch out for these and other hidden costs on your behalf -- and that can be a money-saver in the long run. You can contact me anytime to discuss how buying a bank owned home on Bainbridge Island measures up in this September's market.