A Complete Guide to Finding and Buying Repossessed Houses in Iowa
Repossessed houses, also known as bank-owned or REO (Real Estate Owned) properties, represent opportunities for potential homebuyers to purchase properties at competitive prices. These properties have been reclaimed by lenders after borrowers default on their mortgage payments. Understanding how to find and purchase these properties requires knowledge of the foreclosure process and local market conditions.
Where Can I Find Bank-Owned Homes in Iowa?
Several reliable sources exist for finding bank-owned properties in Iowa. The primary platforms include:
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Multiple Listing Service (MLS) through local real estate agents
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Bank and lender websites (Wells Fargo, Bank of America, US Bank)
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Government agencies (HUD, Fannie Mae, Freddie Mac)
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Online real estate marketplaces (Zillow, Realtor.com, Foreclosure.com)
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County courthouse auction listings
Understanding the Foreclosure Process in Iowa
Iowa follows a judicial foreclosure process, meaning foreclosures must go through the court system. The timeline typically includes:
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Default notice (after 120 days of missed payments)
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Filing of foreclosure petition
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Court proceedings
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Redemption period (typically 12 months)
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Sheriff’s sale
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Property becomes bank-owned if not sold at auction
Are Repossessed Properties Cheaper Than Market Price?
Repossessed properties in Iowa often sell below market value, but the discount varies significantly. Factors affecting price include:
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Property condition
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Local market conditions
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Length of time on market
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Lender’s motivation to sell
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Competition from other buyers
Average Costs of Bank-Owned Properties
| Property Type | Average Market Price | Typical REO Discount |
|---|---|---|
| Single Family | $200,000 | 15-20% |
| Townhouse | $150,000 | 10-15% |
| Condo | $125,000 | 12-18% |
| Multi-Family | $300,000 | 20-25% |
Prices, rates, or cost estimates mentioned in this article are based on the latest available information but may change over time. Independent research is advised before making financial decisions.
Iowa Cities with High Foreclosure Listings
The following cities consistently show higher numbers of foreclosure and REO properties:
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Des Moines Metropolitan Area
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Cedar Rapids
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Davenport
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Sioux City
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Waterloo
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Council Bluffs
Each area’s foreclosure rates fluctuate based on local economic conditions, employment rates, and housing market dynamics.
Tips for Purchasing Repossessed Properties
When considering a bank-owned property purchase:
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Obtain pre-approval for financing
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Work with an experienced real estate agent
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Conduct thorough property inspections
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Research title history
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Budget for repairs and renovations
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Understand the as-is nature of most REO sales
Buying a repossessed house can offer significant savings, but success requires careful research, due diligence, and understanding of the local market conditions. While these properties often present good value opportunities, buyers should carefully consider their investment goals and ability to handle potential property issues before proceeding with a purchase.
