When homeowners are no longer able to make their house payments, the banks who are holding the mortgages on their homes will institute foreclosure proceedings. If the homeowners cannot pay off what they owe before the proceedings are finalized, the banks will be awarded title to the homes, which are then called bank foreclosures. While every foreclosure is someone else's sad story, it can also be a home buyer's ticket to a new home.

Banks Are Not In The Home Selling Business

The important thing about bank foreclosures, from a buyer's standpoint, is that they are easy to acquire simply because you can purchase them through the bank, which will be anxious to unload them. Banks are not interested in carrying the costs of maintaining and insuring foreclosures, and really just want to recoup the balance of the mortgage and the costs of foreclosure.

Banks will either advertise their foreclosures or place them through a realtor, but in any case the sales proceeds will be put toward the unpaid mortgage and anything over than will be used to finance the mortgages of the homes' new buyers.

Bank Foreclosures Are Great Buys

If you are in the market for new home, you can save yourself between 10% and 15% of a homes' market value if you buy a home in a foreclosure by a bank. While this is not as large a discount as you might potentially get by buying a home from a foreclosure auction, it is still a significant savings. And you can rest assured that you won't be surprised by any overlooked liens or judgments on a home you buy from the bank. The only things with which you need to concern yourself is the home's condition and the amount it will cost to make it livable.

More Advantages Of Bank Foreclosures

Nor will you be stuck with having to pay back taxes on a foreclosure by bank, or be confronted with an entrenched homeowner who is fighting the foreclosure process. The bank will happily give you open access to the foreclosed properly so that you can perform a thorough inspection, and determine exactly what you will need to do to the property to make it livable.

If the cost of rehabbing a property will devour whatever discount you may get for buying it from the bank, you may want to reconsider.

If you have concerns about the condition of the home in a foreclosure, you can negotiate a lower price, reduced down payment, and lower interest rate, because the bank certainly is not interested in spending money to make the property more marketable. Banks exist to make a profit, and will take a small profit over a loss. So they will be very flexible when it comes to their foreclosures, and you can take advantage of that flexibility!

You can find an updated list of bank foreclosures in your area by checking out the Foreclosure Data Bank, or by contacting real estate agencies who work with the banks to market the properties directly so that they are not put on the foreclosure auction block.

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