A home that has been foreclosed by a lender and has not been sold through a real estate agent is passed on to the bank and ends up being bank owned. There are a number of reasons why a home may be foreclosed, but usually it is because the owners have hit a time of financial hardship and are unable to keep up the mortgage payments on their home.
The main benefit of purchasing a Bank Owned home is that the prices of these homes are usually very low in comparison to other similar homes on the market. The banks do now want the homes to stay vacant for too long, as they do not bother to maintain them. The longer that a homes stays vacant for, the worse the state of repair that it can fall into. In addition to this, the bank will try to make as quick a sale as possible so that they don’t lose any further money from the original mortgage value.
If you are selling your home and are worried about the timing of your new home being vacant, then a bank owned home might be a good idea for you. Because they have been foreclosed, the homes are already vacant. You will not need to wait for any current owners to find a home to move to, you can simply just move in.
If you are a developer, then you could benefit too from bank owned homes. Many banks do not bother to sell to members of the public, as this only results in the sale of one property at a time. Instead, the banks will sell multiple homes to a developer at once. The bank managed to move several homes at a time, and the developer is happy as they are getting a good deal.