Bank Owned Homes for Sale in Colorado Springs
The Colorado Springs Real Estate market has seen an influx in bank owned homes for sale in the past couple years.
What is a Bank Owned Home?
A “bank owned home” is a home that a mortgage company, or bank, takes ownership of after the home goes through a foreclosure. Sometimes this is referred to as REO – Real Estate Owned property.
What is a foreclosure?
Per the RealEstateWiki, a foreclosure is “a legal process whereby property pledged as security for a debt is sold to satisfy a debt in the event of a default in payments or terms.”
Very Basic Example: John Smith finds a home for sale in Colorado Springs that he wants to buy. He talks to a mortgage lender and gets qualified to buy the home. The loan that he gets to purchase the home is called a mortgage. John makes monthly payments on this mortgage loan every month for 3 years. At the end of the 3 years, John becomes unable to keep making payments on this mortgage loan (many reasons can cause a person to no longer make payments). The mortgage loan now goes into default, and the mortgage holder, or bank, starts the foreclosure process. After a specified amount of time, John is forced to move out of the home and the property is now the property of the mortgage lender, or bank. Now, the property is bank-owned, or an REO Property.
Banks are in the business of lending money, not owning homes. So, when a bank DOES wind up owning a home, they are motivated to SELL it, even at a loss, just to get it off their books.
The Colorado Springs real estate market HAS seen less foreclosures than the rest of the nation, for the most part. However, we still have seen more foreclosures than we have been used to in recent years. And when there is a higher level of foreclosures, as we have seen recently, there is also a higher level of bank owned homes for sale in Colorado Springs.
In many cases, a bank owned home as competition makes it a little tough to sell a home in Colorado Springs. As I mentioned earlier, banks are not in the business of owning homes, so they are more than likely going to “dump” their properties for a loss, in many cases. These homes are usually cheaper than the market value of other homes for sale in the same area. The more homes a bank owns, the greater loss they are willing to take when selling.
However, home buyers and real estate investors are now faced with a unique opportunity, here in Colorado Springs. With interest rates still at historic lows, and bank owned properties selling for less than market value, a home buyer could easily walk into a potentially nice equity-position.
But this opportunity is not going to last…
Many banks are restructuring how they initiate the foreclosure process. We work with many sellers who are facing foreclosure, but would rather SELL their home instead of have it foreclosed on. We are able to talk with many banks and mortgage companies throughout this whole process. We are finding that many of these banks are willing to work with the home owners to reconfigure payment plans that will better suit their financial needs or, extend the foreclosure date to accommodate a sale of the property to a new owner. Again, banks do not want to own a home.
With all these new policies and proceedings beginning to take effect, banks will own less homes (which is their intent) and therefore, there will be less bank owned homes for sale opportunities for home buyers in Colorado Springs.
If you are thinking of buying a bank owned home for sale in Colorado Springs (or Fountain, or Falcon, or Monument or Manitou Springs …) we have set up a special search for you. This search is linked directly to our MLS, and will give up to the minute details on ALL bank owned homes for sale in Colorado Springs (and surrounding areas).
- Top 3 Ways to Avoid Foreclosure in Colorado Springs
- Why a Colorado Springs Short Sale is a Great Alternative to Foreclosure
- Foreclosure SUCKS – You Have Options
- Writing an Offer on a Bank Owned or REO Property in Colorado Springs
- Colorado Springs Short Sale Scam is Mortgage Fraud
- Colorado Springs Home Owners Beware of Foreclosure Assistance SCAMS
- Foreclosures in the Colorado Springs Real Estate Market
- Buying a Colorado Springs Foreclosure or Bank Owned Home