What to Know Regarding Real Estate-Owned Properties
Posted by: real estate / Category: ForeclosuresA real estate-owned (REO) house, also called a bank-owned property, is generally one that did not successfully make it through the foreclosure auction process. As a matter of fact, rather than auctioning the home after foreclosure to discharge the original mortgage loan, the lender, which is ordinarily a financial institution such as a bank, takes over ownership of the home and endeavors to get rid of the property itself.
Because foreclosed properties generally cost more than they are worth (particularly when you tally up all the expenses linked to foreclosures aside from the actual price), not every foreclosure auction results in success. When this happens, the bank will claim ownership of the home and the home becomes real estate-owned. Fundamentally, the bank is at this point homeowner.
This also denotes the mortgage loan no longer exists, and the bank assumes the task of removing anyone who may still live in the home (both of which would be situations the successful bidder at the auction would have to take care of). The bank may even make repairs to the home.
Pointers for Buying Real Estate-Owned Property
Each Lender handles real estate-owned sales differently. One bank may try to sell an REO property at an auction, while another may employ the help of a realtor. It is good to familiarize with how the particular bank you are dealing with handles selling REO homes. Or, if you are particularly in the market for an REO property, look for a financial institution selling one using a method with which you are comfortable.
Meanwhile, consider these tips for purchasing an REO property:
Do not assume you will get something for nothing. Although the bank hopes to sell the home, it is not likely to be willing to sell it for a song. A bank will want the home’s whole market value, or pretty close to it, and the bank may even present counter-offers after you tender your first offer. Certainly, remember to consider the condition of the property when you submit an offer or a counter-offer.
Request information about financing. Banks do not normally offer funding for homes they possess, but you can still ask. If the bank does not offer financing, make sure you are ready with another plan, as the bank may require it.
Carefully read the fine print. Although the bank may submit a few home repairs, it will likely want to get rid of the property “as-is”. However, this does not mean you can not reach an agreement regarding certain other repairs or guarantees. Include such requirement in your offer and begin a negotiation process.
Request a property viewing. Even if the bank has repaired the property, or even agrees to make further repairs, you can always request to have a home inspector look at the place. You may also want to request any inspection reports for the home the bank has on file.
Get back-up. Whether a realtor or a lawyer, find a specialist who is experienced in handling real estate-owned sales. In addition to helping make sure you are receiving the best deal possible given the property and price, this person can help you present your offer, collect other required documents, and perhaps even negotiate the price.
If you are not ready to buy, consult Desert Wide Properties for Chandler, Arizona property management. If you are looking for that bargain golf property, take a look at Goodyear golf real estate.
Karen_Bellas
Last 5 posts in Foreclosures
- Government Tax Foreclosures Can Be Amazing Opportunities - April 1st, 2009
- Clean Foreclosure Homes - Where to Get Clients Who Need Your Services - April 1st, 2009
- Prevent Foreclosure Scams - April 1st, 2009
- How Do You Buy Foreclosed Properties? - April 1st, 2009
- Owner Financing - The Foreclosure Process - April 1st, 2009
When buying a new construction condo in Ontario, the Tarion Warranty Corporation provides protection to buyers under the New Home Warranty Program. Membership of this program is mandatory for new construction builders by offering protection to buyers of new construction projects. Such protection includes: deposits, defects in the workmanship and materials and protection issues involving delayed closings and occupancies.
The program covers buyers for a number of items however the most important especially in this market is a deposit guarantee. With news about new construction condo projects not moving forward, it is a reassuring to know that the buyer is covered… Continue reading
Many homebuyers say they are waiting to find the right home before getting pre-approved with a lender, and I let them know that is a bad idea. Everyone should get pre-approved before starting to look for a home, because it helps narrow down their search into homes they can afford, helps their negotiating ability, and helps them find the most home for their money.
A good faith estimate from a lender can make a big difference in negotiating an offer because it helps in writing that offer. If you know how much the closing costs and prepaid items will be, then… Continue reading
The Weekly Homebuyer’s List in the Denver Post catalogs residential real estate sales in Colorado. The Homebuyer’s List for the week of May 24th totaled only 62 sales for all of Douglas County, CO. The low number of sales may not surprise many in the current market, but a closer examination of the problem reveals a strange disparity in housing prices. It may be easier and a little more fun to think of today’s market as a Monopoly game.
** The most expensive property conveyed last week in Douglas County, CO was for $1,050,000. That would be Boardwalk in Monopoly terms… Continue reading
If you’re getting ready to buy a new home then this article can save you tens of thousands of dollars in interest.
Did you know that the government will give you over $15,000 in order to make it down payment on a new home? Did you also know that if you need money for home repairs the government will give you money to repair your home? Did you also know that if you have a business that you would like to start the government will give you up to $100,000 to work from home?
The government gets money from for major corporations… Continue reading
Related posts
Tags: Foreclosure, home inspector, mortgage, mortgage loan