What You Should Know About Real Estate Owned Properties
When banks foreclose on homes with unpaid mortgages, the lender will first attempt to auction the property at a trustee sale. If the home does not sell at auction, the lender reclaims the property and it becomes an REO or Real Estate Owned property. The home is marketed for sale as-is by a real estate broker. It is often marketed at a discounted, but fair rate.
How to Buy an REO Property
Search for REO properties available for sale by contacting lenders directly or working with an experienced real estate agent.
Get to know the REO process with the help of a real estate professional so that you know what to expect.
Factors that influence loans for REO home are credit history, intent, and the condition of the home.
Negotiate to get the price you want.
LandCastle Title provides one single point of contact with the comfort of knowing we’ll handle your REO closing quickly and efficiently.
Advantages of Buying a Bank Owned Property
1. No Homeowners: Deal Directly With the Bank
When you buy REO properties, you only deal with the bank. REO properties often are vacant, so home buyers don’t have to deal with tenants reluctant to leave, troubled homeowners or former owners threatening legal action. The bank has no emotional attachment to the home.
2. No Outstanding Taxes
Did the last homeowners stop paying their property taxes?
To entice buyers, the bank may waive any outstanding real estate property taxes due on the property. However, a title search is necessary to confirm what affects the title of a property.
3. Option for a Home Inspection
Unlike properties sold at foreclosure auctions, you can request to see and inspect bank-owned properties before you make an offer. And you absolutely should. REO properties are typically distressed homes, and the former owners are not likely to have kept the place up to date or even move-in ready. Serious work may need to be done.
4. Discounted Prices
Probably the biggest reason that people first get interested in REO properties is because of their below market value prices. But that doesn’t mean you are necessarily going to get a steal. Homes that require too much repair work can quickly become just as expensive as—or even more expensive than—move-in ready, homeowner-sold properties. They’re not all diamonds in the rough. Compare the bank’s asking price with other comparable homes in the area and be sure to get a thorough inspection.
Rely On LandCastle Title to Guide You Through the REO Process
Every owner, purchaser and beneficiary needs an insured title to protect their interests. Teaming up with the right partners for closing services is no less important. Whether this is your first REO home or fiftieth, a LandCastle Title Representative will be happy to assist you.
Contact us today!
Colley, A. (2015, January 22). A guide to reo properties. Retrieved from http://www.realtor.com/advice/guide-reo-properties/
Donofrio, C. (2014, July 14). Must-know financing options for an REO property. Retrieved from http://www.realtor.com/advice/must-know-financing-options-reo-property/
Colley, A. (2014, November 4). Top 4 reasons to buy a bank-owned property. Retrieved from http://www.realtor.com/advice/top-4-reasons-buy-bank-owned-property/