Are Bank Owned Properties Always Bargains?

As a former banker, I'm always taken aback when someone describes the actions of a bank in terms you might normally ascribe to a human being.  Banks do not make emotional decisions, sometimes the decisions seem irrational, but you really need an advanced degree in macro economics to understand how risk adjusted assets (loans) are dealt with once they go bad.  Sometimes economics dictate that the bank dispose of the asset as quickly as possible, and at other times that is not the case.

Banks also make mistakes.  Not always big ones, either.  Sometimes just believing that a million dollar home is worth $1.1 million is a blunder that that has the home sit on the market for years while some underwriter a thousand miles away is stymied by the lack of offers.  I suppose that is a small mistake which becomes larger overtime.

At any rate, it's always better to have someone on the ground looking at the bank owned property you are interested in just in case the bank has made a valuation mistake.  Just remember, even though many safety procedures have been put in place, banks do make mistakes, so their homes are not always bargains.....   

http://www.youtube.com/watch?v=txKvs0xPbYM&feature=c4-overview&list=UUjGj-5WsxYPBhw3U5ItD1Iw

© John Gaudiano
http://johngaudiano.com

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