Is it cheaper to buy a repossessed house ?

Bank-owned properties, also called REO homes, are sometimes priced below market value but you don't get to just pay the remaining mortgage balance. That's not how it works. When a bank repossesses a home through foreclosure, they own it outright. They set the asking price based on the property's current market value, not based on what the previous owner owed. If the home is worth $250K and the previous owner owed $180K, you're not buying it for $180K. You're buying it at or near market value. That said, banks are motivated sellers. They don't want to hold real estate. REO properties are often priced competitively to sell quickly, and there can be room to negotiate, especially if the home has been sitting on the market or needs work. Banks typically sell REO properties as-is, meaning they won't make repairs. That as-is condition is often where the discount comes from, not the loan balance. You can find bank-owned properties on sites like HUD Home Store for FHA foreclosures, HomePath for Fannie Mae properties, and HomeSteps for Freddie Mac properties. Your local MLS will also list REO properties. Work with an agent who has experience buying REOs because the process and paperwork are different from a standard purchase.

I assume you are referring to a foreclosure property, and these days, a significant discount is rare on these given the limited inventory of the market. There are also additional complications like the often as-is component and often cash deals. Keith Jean-Pierre Managing Principal The Dapper Agents Operations In: NY, NJ, FL & CA

You can save money (sometimes) with a bank foreclosure. It can be a risky purchase also. Make sure you do adequate research prior to spending your hard earned cash on the pros and cons of buying a foreclosed property. You may save $$ or end up with someone big issues.

There are a lot of factors that go into a Repossession or a foreclosure process. It is not as simple as just buying it from the bank. There also are not as many of these on the market and many times the banks have become smart to do renovations to them to get the retail price from the asset. So I would recommend connecting with a LOCAL REALTOR to be able to answer the questions about this specifically for your local market and how the market is with these options. We have very few of these in our current market in the SC area. So see is an agent in the NM area can help answer this about your local market.

Hi Trudie. I would suggest talking with a local licensed REALTOR. Here in California, someone can buy a home that is at auction due to foreclosure or they can purchase it once the bank takes official ownership. I have many years of REO experience, in the past banks have hired local REALTORs to list the homes and sell them as if it was a traditional sale. Some banks will have formal appraisals done to determine the value or they will ask for a BPO (broker price opinion) to determine the value. More times than not, the home is sold nearish market value. There is always a chance for a "deal" though! Hope that helps!