How To Get A Great Deal On A Foreclosed Property In 2009
Posted Jan 22, 2009 @ 12:50 am, Viewed by 623 Visitors, Read 631 Times.
Although buyers can also find bargain prices on pre-foreclosure sales or homes sold at foreclosure auctions, most buyers find it easier and less risky to purchase REOs from the lending institutions and government authorities that repossess these homes. (Note: REOs also can refer to properties purchased by corporations from their transferring employees. This article focuses on REOs resulting from foreclosure proceedings.)
Finding a high-value property and negotiating a low-cost contract are the keys to success in the months ahead. Here is the critical information REO buyers need to know:
Why Buy An REO?
REO homes are most attractive to buyers looking for bargains. They know lenders and government organizations don't really want to own homes and would rather move their "non-performing assets" off the books as quickly as possible.
Still, being responsible to stockholders or taxpayers means institutional owners will try to recover as much of their investment in a foreclosed home as possible. Negotiating is key to getting a true bargain price on an REO!
REO foreclosures offer some distinct advantages to buyers:
+ Opportunity for professional inspection. Being able to thoroughly inspect an REO can help ensure against unexpected problems and expensive repairs. Inspections are often not an option at earlier stages of foreclosure, especially at auction, when properties are frequently sold "as is."
+ Easier financing. The lender or government agency may offer an attractive financing package, perhaps including a lower interest rate or smaller down payment requirement than might be available on the open market. Chances are also better that outside lenders will consider financing an REO, since their appraisers get a chance to look at these properties. REO buyers can also negotiate for a financing contingency in their contract with the seller.
+ No eviction problems. By the time institutional owners put their properties on the market as REOs, former owners or tenants typically have already moved out. Again, this may not be the case with pre-foreclosure and auction sales.
+ Better condition. Homes in default and sold at auction may not be in great shape, either due to neglect by their cash-strapped former owners or damage caused by disgruntled residents or vandals. Lenders and government organizations selling REOs, however, sometimes make repairs, returning properties to livable condition--or discount the prices to sell more quickly.
+ Listings with brokers. Most REOs are listed for sale with a real estate broker/REALTOR® who is bound by law and ethics to represent the property truthfully. (In some states, however, lenders are exempt from some disclosure rules.)
Call On Me -- Your Neighborhood Expert
Remember: All real estate is local. That's why it's more important than ever in 2009 to work with a top-notch local real estate professional--after all, you're not buying a home across the country, you're buying a foreclosed property right here.I can help! As experienced neighborhood specialists, I make it my business to represent buyers of foreclosed properties. Contact me to learn how I do it. There's no cost for this information--and absolutely no obligation to you!
Lonnie Snyder
REALTOR®
Keller Williams Realty Southeast Sound
Phone: 206-406-2710
E-Mail : snyder@kw.com
Website: http://www.callsnyder.com/
Blogsite: http://renton-real-estate.blogspot.com/
Lonnie Snyder is a full time real estate agent and REALTOR® with Keller Williams Realty specializing in Residential Real Estate for buyers and sellers in Washington’s Kent, Renton, Newcastle and South Bellevue.
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I've recently had a pretty good experience with a bank-owned property in Madison, WI. Out of six offers the seller received in total, we got the accepted offer for a modest sum over the asking price which was many, many tens of thousands of dollars under the current assessed value. The property was unpleasant to tour due to the fact that it had been winterized and we have been experiencing extremely cold temperatures in WI but that was pretty much the worst of it. All the repairs are purely cosmetic and in the course of re-winterizing the property so that we could complete our inspection, the furnace was even repaired at the bank's expense (without heating the house you can't very well turn the water back on in the dead of winter). Of course the bank does call all the shots in terms of when and where we'll be closing but we know the latest possible closing date - a little later than we wanted but a small price to pay for such a good deal on a home. My buyers are absolutely thrilled they're getting such a good deal (way below their budget) and a home they can really fix up to their heart's content and make their own. With their having been so many offers on the same home, I can't help but think REOs are one of the most attractive opportunities to buyers in the current market.