Real estate in America is in demand. Buyers have been flocking to the market over the last several months, looking for more space or to take advantage of low interest rates. But sellers have not returned in the same numbers, creating a shortage of inventory. If you’re a buyer who has had difficulty having an offer accepted, then maybe it’s time to look at a real estate owned (REO) property.
What is an REO property?
An REO, or real estate owned property, is a home that has fallen under the ownership of a mortgage lender or investor. This happens when a home fails to sell at a foreclosure auction, usually because it did not reach the amount needed to cover the loan. The lender then takes ownership of the home, and at times will sell it for less than market value in order to minimize days on market and to optimize their return.
Finding an REO property
To find REO properties, you can look at bank and lender listings, the MLS, listings from the Department of Housing and Urban Development (HUD), or Fannie Mae and Freddie Mac. You can also work with the experts at Agent REO to find your ideal property that is within your desired price range.
Getting an appraisal
To be sure that you’re making a good financial decision, you should get an appraisal for the property. You can then compare the appraised value with the asking price. Generally speaking, REO properties are a bargain, but you should still compare them with comparable sales prices for homes in your area. When you have an appraisal, you can feel confident about whether or not the asking price is fair.
Making an offer
The lender or investor who owns the REO property is going to want to get the listing off their books as soon as possible. They want to be sure that any deal for the home is going to finalize right away. For this reason, you should get pre-qualified for a mortgage before you make your offer as this will speed up the closing process. It will also signal to the lender that you’re serious and you’re likely to make it to the closing table with no financing problems.
Getting a home inspection
After you make an offer and before you finalize the purchase, you should get a home inspection. Though REO properties are usually sold “as is”, you want to find out what kind of repairs the home will need. If the home needs major repairs, then you may be able to negotiate the asking price. In some cases, the lender may have already conducted an inspection. If that’s true, then you can ask them for a copy of their inspection report.
Verifying the title
Finally, it’s important to protect yourself when purchasing an REO property by verifying the status of the title. Since the home was in foreclosure, you want to make sure you’re not responsible for any outstanding liens or judgments against the property. If the lender does not have a title company lined up, then you should hire one yourself to do a full title search before you close.
Contact Agent inc. today!
It’s important to work with an expert when you’re buying an REO property. Contact Agent inc. or Agent REO at 949-791-8160 or [email protected] to get started. Let’s open your world to new possibilities!