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Buying Properties From the Bank: What You Need to Know

Buying Properties From the Bank: What You Need to Know

When buying properties, there are a lot of factors that need to be considered. While most look into developing projects or already existing properties ready for occupancy, one option that you may consider is looking into purchasing foreclosed properties. 

What are foreclosed properties? These are properties which were taken by lenders or the government, due to the inability of the other party to pay the necessary payments or taxes. Financial institutions, such as banks, are one of the lenders that repossess such properties and resell them to the market. These properties may be considered as an alternative option by potential buyers due to their lower price point. 

In building different properties, some of the factors that one must consider are the cost of materials, location of the property, specification to the building of the property, and the like. In buying foreclosed properties, these factors can be narrowed down already, as these properties are already previously built. However, there are other factors that one must consider when buying foreclosed properties. 

One of these factors is the existing condition of the property. One must thoroughly inspect the property to know whether the property is worth its selling price as compared to the repair that needs to be done to it. Additional costs must also be looked into, such as the different tax obligations that need to be paid. An important point of consideration as well, is the location of the property. By knowing where the property is located, you are able to know if the property is within any flood zone or fault line. Proximity to the nearest essential establishments such as schools, work areas, transportation points, and shopping districts must be looked into.  

Another factor is the status of the foreclosure. There are instances whereby the properties foreclosed by the bank are with issues. The banks usually tag the properties as: green, yellow, or red. Green are those properties with no ownership issues. Yellows are those properties which may already be under the name of the lender, but the possession is not within the hands of the lender. Red usually means there is ongoing litigation. Usually this is a case where the borrower disputes the foreclosure process.

While those are the factors that you might want to look out for, there are a number of advantages to purchasing properties that are foreclosed. In buying foreclosed properties, those who own these properties are banks and the government. Thus, you are sure that the transactions that you are dealing with are legal and legitimate. If the property that you are about to buy does not have any pending case in court, the title of the property can be transferred to you immediately. 

Note, however, that along with the ownership of the transferred property, liabilities that come with it will also be transferred to you. 

Foreclosed properties are also sold at a lower cost so that they may be sold quickly. Thus if you are looking not to purchase properties to use personally as your own residence or other such usage, you can acquire these properties and use it as an investment. Depending on the extent of the repairs that you may need to do to the property, you can definitely earn a profit once you resell it.       

Need further information and assistance regarding buying properties from the bank in the Philippines?  Talk to our team at FILEDOCSPHIL to know more about the requirements and process. Call us today at (+632) 8478 5826 or send an email to info@filedocsphil.com for more information.

 

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