Consider buying a bank owned property, also known as an REO property. REO homes are a special type of property that will get you a great deal for your money.
An REO property is a house that has been foreclosed. The previous owner could not make the mortgage payments on time and in full, so the bank repossessed the property. It then went to auction and either did not receive any bids or the bids weren't high enough to satisfy the bank. Therefore, the property was officially reclassified as a bank owned property, otherwise known as an REO.
REO homes have definite advantages. Also, an REO property has been cleared of all liens against the mortgage, meaning it will be much easier for you to take ownership of the house. Plus, banks are much more inclined to put in a little effort to get REO houses off the market.
They will let you get a professional home inspection and sometimes they encourage you to inspect the property yourself. With foreclosures, you get the house in "as-is" condition at an auction, sight unseen. The bank will do small repairs to bank owned properties and even accept requests for other repairs from potential buyers on occasion.
Because banks are willing to make repairs and negotiate a great rate on these properties, they don't usually last very long on the market before they find a qualified buyer. This is why you have to act quickly to get the house you want. Teaming up with a qualified real estate agent makes the entire process much easier.
A Realtor will often know about the best properties before they ever hit the market. Also, finding the right person to contact at the bank is much easier for a real estate pro than the average person. When a real estate professional enters the picture, the banks are much more willing to take phone calls, and subsequently, your bids.
Before your real estate agent ever makes a bid on your behalf, he or she will determine what the property is actually worth. It is very easy to get swept up with excitement and overbid on a bank owned property. Your agent will use a variety of resources to establish the home's true market value.
Then, your agent will determine the bank's bottom line while you are prequalified for a loan if you need financing. While the bank considers your bid, the paperwork will be prepared for the deal. Expect the entire process to happen very quickly.
The bank will likely make a counteroffer, and your real estate agent will work to get you the best deal possible. If at any time the house is overpriced and a better deal will be found elsewhere, your real estate agent will tell you. Listen to them and be flexible until you find the perfect property for you.
The world of bank owned properties is fast-paced and complicated. From Manhattan to San Diego, people are getting great deals on REO homes. If you'd like to get one for yourself, contact a reputable real estate agent to serve as your guide throughout the process.
Kari Shea is a real estate professional with Shea Real Estate & Investment Groupwww.shea-realestate.com.
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