Content

• Steps
• Tips
• Warnings

The property owned by the bank is usually real estate, the purchase of which was financed by the bank, but the default of the borrower forced the bank to take the property back into its possession. Since banks are not primarily in the property management business, they list properties for sale on an "as is" basis in order to sell as quickly as possible. According to the terms, the buyer of the property is responsible for the condition of the property, whatever is required to be done, any necessary repair work becomes the buyer's concern, unless otherwise stated. Just as banks finance residential real estate, they also finance commercial real estate and, accordingly, often list commercial real estate for sale.

Steps

1. 1 Find listings of commercial properties for sale by banks. There are a number of ways that you can find these objects:
   • Consult with a real estate agent who specializes in banking property. It will be especially helpful if you find a realtor with experience in commercial real estate transactions with banks.
   • Call local banks and ask to speak with someone from the real estate sales department. Most banks have either a specific department or a manager who works with such real estate and knows all its characteristics.
   • Follow the local press for real estate auctions. Banks always try to put their items up for auction before offering them for sale at a fixed price. Statistics show that most of the objects that go up for auction are never sold at auction. Therefore, auctions are a good way to identify commercial properties that will soon appear on the market.
2. 2 Collect money for a down payment and expertise. Unlike home loans, which often do not require a down payment, you may be required to provide at least 25 percent of the sale price in order to obtain a commercial loan.
3. 3 Get pre-approval for a commercial loan. You will need to provide the following information in order to qualify for a commercial loan:
   • Your business plan. This is not necessary if you are buying an apartment building in which you yourself will live. Instead, you will need to provide current leases with any existing tenants or signed leases with tenants that will move in.
   • Financial reports of your business. These include bank statements, tax returns, income and expense reports, balance sheets, and anything else the lender will ask you to check your loan repayment options. If the commercial property you plan to buy is an apartment building, then you will need to provide your own financial statements.
   • Proof of the first installment.
4. 4 Collect information from realtor lists before making an offer:
   • Copies of any examinations performed.
   • Any repairs to the property that the bank agrees to pay.
   • Is there a special form "as is" that you will need to sign.
   • How long will it take for the bank to accept or reject your offer? You can also expect a counter offer from the bank.
   • The way to send your proposal.
5. 5 Make an offer on the list of a realtor. Submit an offer to buy a property considering the following:
   • Calculate how much the final costs will be, and make sure you have that amount on hand.
   • Be careful not to offer too low a price, or you risk that the bank will not take you seriously as a buyer. Consult with a real estate agent who specializes in commercial real estate.
   • Include a clause that allows you to evade the transaction if the construction expertise reveals problems with the object that you consider unacceptable.
   • Be prepared for a counter-offer. Banks rarely accept a first offer to sell a property and generally respond with a counter offer. Take this into account when making your first offer and be prepared to negotiate the final sale price.
   • Attach your loan pre-approval to your proposal.
6. 6 Make sure the commercial property is in an acceptable condition for you. Once your proposal has been accepted, hire the following professionals:
   • Construction inspector. The inspector will make a thorough assessment of the condition of the property and will give you a written report of any necessary repairs, as well as point out what you can improve.
   • Title agent. The title agent must do a thorough investigation of the title to ensure that the title is clean and that the property can, in fact, be sold.
7. 7 Submit a counter offer if the property requires any unexpected repairs that you offer to pay to the bank. Review the terms until both sides are satisfied.
8. 8 Work with your lender to close the deal. This includes providing any additional documents to the lender and the title company that they need in order to close the loan.

Tips

• If the bank doesn't accept your offer the first time, keep monitoring the property. If it stays on the market for a long period of time and you notice that the selling price is dropping, the bank may be more receptive to your proposal if you reintroduce it.

Warnings

• It is perfectly true that banks want to sell their commercial property quickly, but that does not mean that you will necessarily be able to purchase property at a price below market value. Banks always seek to recover the amount of money that their borrowers owe them due to default, and this amount usually exceeds the value of the property, otherwise the borrowers would sell the property themselves and pay the bank.