Due to the non-repayment of the borrowing by the property owner, bank will take the repossession of the said property and it’s called as Bank Repos. In this course, banks don’t want to hold the property in their account by increasing their inventory. Banks are there in the core business of lending money. If the quantum of Bank repos increases, banking industry will unload their owned properties. In the recent past days, bank repos have reported in the large number at Placer country. In Placer country, when the unforeseen circumstances rose due to the non payment from the property owner, bank has issued the notices and a later stage, the said property has become bank repos. When the property owners contacted the bank expressing their difficulty in repayment, bank are not willing to negotiate with them but now it has caused banks to sell them as their vacated properties inventory got increased.
Generally bank repos property will be sold at a lower rate compare to the market prices. Majority of the bank repos will be in average condition. Here one more thing is that, more than the condition of the bank repo, buying the bank repo property includes more risk than the buying other properties. The main reason is that banks are selling bank repos properties “ AS IS “ condition whereas others will correct the deficiencies, repairs and sell. One more major difference in buying of bank repos property; a direct seller ( owner of the property ) is also selling the property in as is condition only but they will disclose the condition of the house but not willing to repair it. Whereas bank will not be aware of the condition of the house, not willing to repair it and the most drawbacks is that banker would have not stayed there and they will not disclose the real condition of the property. Thus the inventories of bank repos are increasing day-by-day which is not there in other repo.
Any type of investment in this world will have some amount of risk. But while buying a bank repo, buyers are at a higher risk at a lower price and the poor quality of the property. Those who can invest take the risk factor for a long time run, bank repos are the best choice. Then also, buyer should compare the discounted price for bank repos with the similar type of non bank property and finding out the difference between the market rates.
Before buying the bank repos, buyer should determine the cost involved in the bank repos non bank repos and risk factor involved in both type of transactions and if enough profitable gap found, acquiring the bank repos are advisable.
But it is very important to note that always lesser price cannot extend the guarantee for better value.
