What is a REO property?
REO property is a foreclosed property that is not sold in foreclosure auctions because of excessively low bids or lack of bidders; as a result, the ownership of this property is transferred to the lender.
How can I find REOs?
There are many ways to locate the REO properties being administered by banks because many real estate sale sites like http://www.bayreohomes.com/ als o list bank owned property over their website. Otherwise, you may approach the lenders of your area directly.
How can I buy a bank-owned REO?
Anyone capable to pay as per bank's terms can buy a REO property . The main task is to find reasonably tagged bank-owned REO properties and the right people to deal with. Each bank follows different rules and payment terms. However, some negotiations can be made to alter some rules.
Why should I buy a bank-owned REO?
When you buy a bank owned property you don't need to worry about liens or other encumbrances. Smart investors can negotiate with bank's loss mitigation department and sometimes get the property at a fraction of market value. Buying bank-owned REO properties involves less competition and almost no risk. Getting finance of REO property is much easier than in case of general property. While disposing off REO properties, banks offer many facilities like low interest rates and down payments, which are not given to the bidders of pre-foreclosure and foreclosure auction process. Most REO properties are found evicted so the buyers get immediate possession.
Can I inspect the property before going ahead?
Yes, most of the banks allow the willing buyer to visit the offered property at his/her personal expense.
If I submit an offer directly to the listing agent, will I get a better price?
Lenders give commission to their listed REO agents for the maturity of a deal, so the listed agents try to sell REO property at its maximum value to get maximum commission. It is always good to get the help of REO buyer agent because he/she will take care of buyer's interest.
Even the best offer for bank owned houses/properties is subjected to corporate approval. Getting approval of offer/counter-offer from the corporate office is a time taking process. Before going in for an REO deal, it is better to get pre-approval letter for loan. Most REO properties are sold in 'as is" condition hence you can't expect even the minor repairs or finishing jobs to be done by the bank.