Keys to buying bank-owned
properties on LI

One Sunday morning this past winter, Brett Sefchek was scrolling through real estate websites when he stumbled on an ad for a bank-owned property in Long Beach.

The 30-year-old and his girlfriend weren’t even in the market to buy a place — Sefchek was looking for a rental — but the price for the 1,300-square-foot, two-bedroom co-op seemed too good to pass up. He contacted the broker, submitted an offer, secured a mortgage and met with the co-op board. He closed three months later, purchasing the foreclosure for $236,000, nearly $100,000 less than similar properties in the area.

“I wasn’t sure what it was going to be like going into it,” says Sefchek, a sanitation inspector who spent the next few weeks making cosmetic fixes — some drywall, Spackle and paint.

His experience was relatively painless, but the process of buying an REO or real estate owned property — a house owned by the lender, such as a bank — is usually much different from a typical sale.

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