Buying bank owned properties There is a lot of interest in buying bank owned properties these days. A lot of information, some good and some bad, is floating around about the subject. Often the information offered is for sale, with the promise that you can make a lot of money with little effort once you know the secret formula. The fact is that there are no secrets, and to make money does require effort. I will give you the free advice you will need.
What's an REO? REO stands for Real Estate Owned. These are properties that have gone through foreclosure and are now owned by the bank or mortgage company. This is not the same as a property up for foreclosure auction. When buying a property during a foreclosure sale, you must pay at least the loan balance plus any interest and other fees accumulated during the foreclosure process. You must also be prepared to pay with cash in hand. And on top of all that, you'll receive the property 100% "as is". That could include existing liens and even current occupants that need to be evicted. A REO, by contrast, is a much cleaner and attractive transaction. The REO property did not find a buyer during foreclosure auction. The bank now owns it. The bank will see to the removal of tax liens, evict occupants if needed and generally prepare for the issuance of a title insurance policy to the buyer at closing. Do be aware that most REO's for sale today may not have a SPDS or Seller Property Disclosure Statement, a document that normally requires sellers to tell you about any defects they are aware of.
Ready to make an offer? Most banks have a REO department that you'll work with in buying a REO property from them. Typically the REO department will use a listing agent to get their REO properties listed on the local MLS. Before making your offer, you'll want to have a buyers agent that can represent you in the transaction. Remember the agent representing the property has the banks best interest..... not yours. As your agent, I will find out as much as I can about the condition of the property and what their process is for receiving offers.
Buying bank owned properties
