Properties subject to a loan are those that were purchased through a bank or lending company. If the property owner defaulted on making the interest and monthly payment, it could lead to the foreclosure of the property. The bank or lending company acquires title to the property when a property owner subjects it to a bank loan. The property is still under contract to be sold, and the down payment is still being paid. However, the property will be covered by a contract of sale after obtaining a mortgage. In a contract to sell, ownership is transferred after the final payment is received.
The property title will already be transferred to the owner when a property is under a house loan. However, the bank will be in possession of the property title until the owner completes the repayment of the loan. In these cases, the bank or lending company gains the right to encumber. This earns the right to a legal claim on the property if the owner fails to pay the loan, resulting in property foreclosure. BSP foreclosed properties became a popular option among property investors as lending companies and banks sell them at a lower cost, making them a worthy investment.
It is crucial to trust reputable brokers such as banks and government agencies like Banko Sentral ng Pilipinas (BSP). Transacting with a reputable agency prevents you from encountering unfair pricing and fraudulent advertising, the two main problems customers face when buying a foreclosed property. Banks are a well-liked option for anyone looking to buy a property using house financing because banks often provide fairer terms and conditions and lower interests.
Important Tips When Buying BSP Foreclosed Properties
To prevent falling into fraudulent advertising and unfair pricing, here are some tips you can follow:
- Choose reputable banks if you want to make sure you obtain the best property value for your money. Reputable banks have a stricter application process, which means they are among the most reliable banks for granting financing loans. If the bank handles the BSP foreclosed property, chances are the properties are well-maintained. Agencies like BSP sometimes sell foreclosed properties and condos “as is.” This lowers the price and benefits buyers who value location and size more than furnishings.
- Don’t buy BSP foreclosed properties without conducting a site visit. One of the common issues buyers encounter when buying a foreclosed property is the property’s condition upon closer inspection. This can happen if you do not visit the property before agreeing to the deal.
- Examine every corner of the property. Before buying BSP foreclosed properties, it is better to look for any damages that may affect the house’s foundation. You might need to spend more when the foundation is damaged.
- Check out the current market price of new properties within the area. To make sure that you are being offered a fair price, you can research and compare the prices of houses within the area. If the foreclosed property’s condition does not meet the standards, you can try to negotiate the price.