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Regardless of your taste in Real Estate, it's a buyer's market!
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| What is a REO? A REO property is property that is owned by a lender after an unsuccessful foreclosure attempt. When a foreclosure ends unfavorably, the bank tries to remove expenses on the home by finding other ways sell the property. They either try to sell the property through auctions or through a Realtor. REO Buyers want bargains and there is nothing wrong with that. Some buyers even limit their search to REO Properties. There are pros and cons to buying REO properties. They often sell below market price-and that often makes them a great buy. However with REOs, there are usually no seller disclosures. The seller usually sells the REO property in “as is” condition. With REO properties you are negotiating with lenders rather than sellers. You will be dealing with the "real-estate owned" or REO department of the lender who took ownership of the house at the auction. You should be prepared to be patient, since lenders are overwhelmed with distress sales these days and may take weeks to respond to your offer. You should also be prepared before you make that offer and we can help you with that. |
| As the New Year begins and the new administration prepares to take office there are many investors who are scurrying to purchase prime REO properties before any potential legislative changes can stop them. Why? Well generally you can expect to see REO properties priced far below those offered by traditional sellers, more importantly it’s not unusual to see REO properties sell for 20% below the already reduced asking price. That’s something to remember. If you are interested in purchasing an REO property this is certainly a great time to see what is available on the market. |
| Find qualified REO properties today! Just fill out this easy form and recieve your No Cost No Obligation Consultation Today! |
| Buying REO Properties An REO (Real Estate Owned) is a property that goes back to the mortgage company after an unsuccessful foreclosure auction. If what is owed to the bank is more than what the property is worth, the foreclosure auctions might not result in a successful sale. Then the property "reverts" to the bank. It becomes an REO, or "real estate owned" property. |
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REO Properties for Sale The bank now owns the property and the mortgage loan no longer exists. The bank may do some repairs. They will negotiate with the IRS for removal of tax liens and pay off any homeowner’s association dues. As a purchaser of an REO property, the buyer will receive a title insurance policy and the opportunity to investigate the property. A REO property can be a great bargain. Do your homework before making an offer on a REO property. Make sure that the price you pay (if you’re successful) is comparable to other homes in the neighborhood. Consider the costs of renovation, including time to complete them. |
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How Banks Sell REO's Each bank works a little differently, but they all have similar goals. They want to get the best price possible and have no interest in "dumping" real estate. Generally, banks have an entire department set up to manage their REO inventory. Once you make an offer to purchase a REO property, banks generally present a "counter-offer." It may be at a higher price than you expect, but they have to demonstrate to investors, shareholders and auditors that they attempted to get the highest price possible for the REO property. You should plan to counter the counter-offer. Your REO property offer or counter-offer will probably have to be reviewed and approved by several individuals and companies. Even once an offer is accepted, the bank may insert wording like “subject to corporate approval with 5 days." |
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Property Condition Banks want to sell a REO property in "as is" condition. Most will provide a pest certification, but not unless you include it in your offer and negotiate the point. They will allow you to get all the inspections you want (at your expense), but they may not agree to do any repairs. Your REO offer should include an inspection contingency period that allows you to terminate the sale if the inspections reveal unanticipated damages that the bank will not correct. Even though you agreed to “as is," always give the bank another opportunity to make repairs or give you a credit after you’ve completed your inspections. Sometimes they’ll re-negotiate to save the transaction instead of putting the property back on the market, but don’t take it for granted. Most banks will not provide financing on their REO properties but it doesn’t hurt to ask. Especially if the REO property has extensive damage and you are purchasing it "as is." |
| Making an Offer Before making an offer, your agent will contact the listing agent and ask the following:
Find qualified REO properties today! Just fill out this easy form and recieve your No Cost No Obligation Consultation Today! |
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