Real Estate Owned Property, or most commonly known as REO Properties, is a property owned by a lender-usually a bank, government agency or government insurer – after an unsuccessful sale at a foreclosure auction. It is the name given to foreclosed-upon real estate, such as detached houses, condominiums, townhomes and land, in a lender’s portfolio. These REO properties are then listed online, making many REO listings readily available on bank’s websites or other online facilities.
REO Properties are a result of transferred ownership to a bank or lenders due to a loan default, foreclosures, auction or any distressed property status. These are attractive to homebuyers or real estate investors for several reasons. Lenders or banks may attempt to remove some of the liens and other expenses accumulated on the property’s title, and in some cases, sell them at a discount to their market value since selling such properties are not typically their primary line of business.
The question is, how to buy these real estate owned properties? What are the factors to consider in buying REO Properties? We listed down some tips as guide to home buyers or investors:
Dealing with a lender or bank rather than the usual homeowners can lead to a potentially lower price from a motivated seller that has already handled outstanding taxes. Though you need to be more patient and thorough since you may experience slower response times and a more difficult negotiation;
Once you’re decided on an REO property, you may start searching for bank or lender listings, Multiple Listing Service, Real estate agent or any online services that showcase these REO properties. Some of these online facilities are free to use, while others may charge a fee upon access;
This way, your real estate agent knows the ‘ins’ and ‘outs’ of negotiating with a lender, how to calculate the cost of necessary repairs, how to work within the lender’s timeline and how to prepare you for ‘what comes next.’
Start narrowing down your list of REO properties once you are working with a buyer’s agent
An appraisal will help you get an objective estimated value, which you can compare to the bank’s asking price to see if the price is fair.
Though REO properties are sold “as-is,” it is always best to have the property inspected for your future expenses forecasting;
For better or worse, negotiating with a lender for a bank-owned home is different from negotiating with a homeowner;
Once all of the paperwork is in place, you’ve wired in your down payment and your loan funds are in place, it’s time to close the deal.
And if you wanted to know more about REO Properties, you may contact us at CPD Homes through our landline at 216-282-4332, or email us at firstname.lastname@example.org ! You may also visit our website at www.cpdhomes.com ! We’ll be more than happy to assist you in finding your REO Property – FAST!