I would like to thank Jason for suggesting this blog.
What is an REO property? An REO (real estate owned property) is one that the lender has taken back into ownership after they failed to sell the property at a foreclosure auction. The lenders, usually banks, will then try to sell the properties as quickly as possible.
When people think of REO properties they often assume that the property is in poor condition. This is not always the case, although it is the case in some instances. Often times the bank had to retake possession of the property because they could not resell the property at an auction for a satisfactory price. This means that you could get a good deal.
There are some good things about buying bank owned properties:
- Buying REO can be a safe way to buy or invest in property, especially for the novice or first time home buyer. There is little risk to the buyer.
- Even though the bank wants to minimize its loss on the sale they do want to move the property fast because it can cost more in the long run to maintain the property.
- The bank may have paid all the taxes and liens so that is one less worry for you as the buyer.
- With REO’s you don’t have to deal with home owners and their schedules. You can arrange for all your inspections at your convenience.
There are also some bad things to buying REOs:
- The property is sold as is, meaning that the bank will usually not repair anything, but you can always ask.
- The banks often have additional forms; which means that you will be signing more paper work than you would in a normal transaction.
- Usually if you want disclosures regarding the history of the property or any of the other reports normally provided by sellers you may have to get them on your own.
Overall, buying an REO property has more pros than cons and for the patient person it can be a great investment.
If you have any questions related to real estate or if you would like to know more about a specific topic please let me know.
Prudential
housingbydavid@verizon.net
www.housingbydavid.com
The above information was adapted from an article found here http://EzineArticles.com/?expert=Elaine_Berry
hmm im wondering if it would be better deal for a homebuyer to look for a pre-foreclosure property?
ReplyDelete~samantha:)
REO houses sound like a good plan for somebody who has enough money to buy one, sure. hopefully i can get one and fix it up and resell it later on down the road.
ReplyDeleteThey can be a good deal and not all of them have to be fixed up. Granted most need some kind of work but it could be cosmetic, costing a few thousand or less, or major repair, costing 10s of thousands. If you would like info on properties in your area send me an email.
ReplyDeleteGreat question Samantha and the answer is yes and no. If you are buying pre-foreclosure you could be looking at a short sale situation which can take a lot longer. On average short sales take about 4 months for final approval. The properties tend to be in better shape but may still require some work.
ReplyDelete