real estate owned properties
Jun/100
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Guidelines when buying real estate owned properties
Houses that are foreclosed and turned into real estate owned properties or REOs are great options if you are looking for a home that fits your budget. Below are the things you need to do before buying an REO:
Houses that are foreclosed and turned into real estate owned properties or REOs are great options if you are looking for a home that fits your budget. Below are the things you need to do before buying an REO:
1. Secure your finances.
Before buying anything, especially if it demands you to shell out a huge amount of money, make sure that you have the sufficient capital to fund your purchase. Never spend anything beyond your means if you don’t want to get buried in debt. If the purchase needs to be done immediately, say, you are required to make a decision to buy an REO because others are waiting in line to buy the same house you are set to buy, you could approach a hard money lender to help you finance the property.
Conventional banks take longer periods of time, usually up to two months, before approving a loan application, while hard money lenders take only days to process an application. REIWired.com explains this matter further.
2. Check the title of the house you are about to purchase.
Because REOs are bank owned properties, the houses are pre-owned. Double-check if the deed has unpaid or outstanding tax balances with the help of a title company. You have to ensure that the property has a clean title. You should clear the property’s records before sealing the deal because if worse comes to worst, you will now be liable for any ‘skeletons’ the property has when the time comes.
3. Thoroughly scrutinize the property.
It is quite understandable that bank owned homes are sold “as is.” Have a licensed home inspector with you to assist you with checking the interiors of the property for damages. It is smart to hire a home inspector because not only can they pore over the critical points of a house, they can provide you with a detailed computation of the estimated repair costs. Also, they can suggest materials that you should buy depending on your budget.
4. Haggle.
If you feel that the REO you want to purchase needs a lot of repair, you could point out reasons why the price should be lowered to a reasonable rate. Do not hesitate to negotiate with the REO manager of the bank to lower the overall cost of the property—it is your right to ask as a buyer.
About the Author
REI Wired is the ultimate real estate investor network on the planet. The sole purpose of this site is to arm you with the cutting-edge real estate investing tactics being used by the hottest investors in the industry…so you can dominate your competition and close more deals… FAST.
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