Bank-Owned Properties: Everything You Need to Know

Bank owned properties, also known as real estate owned (REO) properties, represent a unique opportunity for savvy investors and homebuyers in Australia. These properties, acquired by banks through foreclosure or other means, often come with potential benefits and considerations that set them apart in the real estate market.

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What Are Bank Owned Properties?

Bank owned properties are real estate assets that have been repossessed by financial institutions, typically due to the previous owner’s inability to meet mortgage obligations. These properties become part of the bank’s portfolio and are subsequently offered for sale to recover the outstanding loan amount. Understanding the nature of these properties is crucial for potential buyers looking to navigate this sector of the real estate market.

How Do Properties Become Bank Owned in Australia?

The process of a property becoming bank owned in Australia typically involves several steps. First, a homeowner falls behind on mortgage payments. If the situation isn’t resolved, the bank may initiate foreclosure proceedings. Once the foreclosure is complete, the property is transferred to the bank’s ownership. This process can vary depending on state laws and the specific circumstances of each case.

What Are the Benefits of Buying Bank Owned Properties?

Purchasing bank owned properties can offer several advantages to buyers. One of the primary benefits is the potential for below-market pricing. Banks are often motivated to sell these properties quickly to recoup their losses, which can lead to competitive pricing. Additionally, bank owned properties are usually sold “as-is,” which can present opportunities for buyers willing to invest in renovations or repairs.

Are There Any Risks Associated with Bank Owned Properties?

While bank owned properties can offer attractive opportunities, they also come with potential risks. These properties may require significant repairs or renovations, as they might have been neglected during the foreclosure process. There’s also the possibility of hidden liens or title issues. Buyers should conduct thorough due diligence, including property inspections and title searches, to mitigate these risks.

Where Can You Find Bank Owned Properties in Australia?

Bank owned properties can be found through various channels in Australia. Many banks maintain listings of their REO properties on their websites. Real estate agents specializing in distressed properties can also be valuable resources. Online property portals and auction houses frequently feature bank owned listings. Additionally, local newspapers and community bulletin boards may advertise these properties, especially in smaller towns or regional areas.

How Does the Buying Process Differ for Bank Owned Properties?

The process of purchasing a bank owned property in Australia can differ from traditional real estate transactions. Banks often have specific procedures and requirements for REO sales. Buyers may need to submit offers through designated channels, and the approval process can be more complex. It’s common for banks to require larger deposits and shorter settlement periods. Working with a real estate agent experienced in bank owned properties can help navigate these unique aspects of the transaction.


When considering bank owned properties, it’s essential to understand the potential costs involved. Here’s a comparison of typical costs associated with bank owned properties versus traditional real estate purchases:

Cost Factor Bank Owned Property Traditional Property
Purchase Price Often below market value Market value or higher
Deposit 10-20% (may be higher) 5-20%
Repairs/Renovations $10,000 - $50,000+ Varies
Legal Fees $1,500 - $3,000 $1,000 - $2,500
Building Inspection $400 - $1,000 $400 - $1,000
Pest Inspection $200 - $400 $200 - $400
Stamp Duty Based on purchase price Based on purchase price

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.


In conclusion, bank owned properties present a unique opportunity in the Australian real estate market. While they can offer potential savings and investment opportunities, they also come with their own set of challenges and considerations. By understanding the nature of these properties, the buying process, and the associated risks and benefits, potential buyers can make informed decisions about whether bank owned properties align with their real estate goals.

The shared information of this article is up-to-date as of the publishing date. For more up-to-date information, please conduct your own research.