REAL ESATE LAWS AND REFERENCES 5.8

What are the issues that I have to be aware of before buying foreclosed property?

Banks are always desirous to dispose the foreclosed property reagardless of what problems it entails for any buyer to assume. But many banks do have foreclosed properties that are still occupied by the owner who is presently contesting the legal process in court. Prospect buyers could not even get the chance to see the inside of the property because of the hostile attitude of the owner. At the last minute, the owner can negotiate with the bank for amicable settlement and therefore lose your chances of buying it. There are also other issues like: illegal occupants or squatters, right of way problem,  tax declaration may delay the consolidation of documents or transfer the title in the name of the bank.

In considering to purchase a foreclosed property, do not be tempted of the bargain price that you can get. If it is really a bargain, why not? But first, check if it’s really a bargain. The problems on the property may have compounded over the years and may even cost you more to rectify. In fact, it’s surprising that many banks do not even have direct control on the properties they are selling as foreclosed. Owners are still in the premises wanting to stay for free at least for a couple of years. In the Philippines, it takes a lot of money to move the case from legal proceedings into the actual eviction of the owner by the sheriff and most banks do not want to spend for this. They rather sell the property at cost and pass on the problems to the buyer.

If you believe that the price difference is so material for the risks that it entails, you might want to go ahead. But most buyers stay out of trouble. They do not want to risk their hard earned money for what seems a bargain and rather wary getting entangled into problems they might not be able to handle.