Question Details

Scott Watson, Home Buyer in Bethlehem, GA

can the bank outbid you?

Asked by Scott Watson, Bethlehem, GA Wed Apr 23, 2008

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They can and often do. There is a common misconception about foreclosure home sales--that the bank will let the property go for the outstanding loan amount. Sometimes that is true. However, most of the time, the bank does their homework with an appraisal before ever releasing the home to the open market--it's becoming an occurence with increasing frequency that a short sale was attempted before the home actually forecloses, so it is likely that the bank has even more information on how the home is positioned in the market. With knowledge of the home's fair market worth in hand, the bank is more likely to compete for the sale instead of letting it go for "pennies on the dollar" as most real estate motivational speakers want to tell you. As with EVERY transaction, proper research is key to knowing whether it's worth pursuing if the bank wants to keep it.
0 votes Thank Flag Link Wed Apr 23, 2008
They do it all the time. Why would they take a Short when they can hold it and resale it at a later date. They also, have a better credit rating when they own the buy it than when they take a Short.

The Banks are buying back everything in many parts of the country and in DC and MD I have noticed this to be the growing trend.

They are very slow to reposses the occupied dwelings once they buy the note back.
0 votes Thank Flag Link Wed Apr 23, 2008
Absolutely! The bank knows how much the mortgage is and will often bid that amount. If you want to bid at a sheriff's sale it is wise to check the title history to find out what else may be owed on the property.
0 votes Thank Flag Link Wed Apr 23, 2008
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