So you have probably heard about the great opportunities that abound in investing or buying REO or Bank Owned Properties. That's great! A lot of people were able to save serious money choosing to purchase REOs.
In order to succeed in your property investment venture, there are two important factors to consider when choosing to invest in foreclosed properties. First, time element - opportunities may abound today, but who's to say it will still be available tomorrow? Suffice it to say, any serious investor or serious buyer should take advantage of the temporary market slump today before it starts to recover. Second, if this is your first foray in REO foreclosures, then you need to double time on learning the ropes. Here are some important facts that may come handy when buying REO homes and REO properties.
Foreclosure vs. REO
A REO (Real Estate Owned) refers to the property that goes back to the possession of the mortgage company after an unproductive foreclosure auction. The thing is, a lot of foreclosure auctions don't even result in the usual bids. If there is enough equity in the said property to fully satisfy the loan, the residential owner will most likely sell the mortgaged property and pay off the debt.
All foreclosure sales will initially begin with a specified minimum bid, which will include the loan balance, accrued interests, attorney's fees, as well as cost that have been incurred during the foreclosure process. To be able to place a bid at an auction, you must first have in your possession a cashier's check with the full amount of your bid. Should you turn out to be the successful bidder, you will then receive the said property in an "as is" condition, which may possibly mean, there is still someone residing in that foreclosed property. Additionally, there is also a possibility that there are other existing liens against this property.
However, in most cases, what is owed to the bank is most likely the same amount of the total worth of the property, although there are actually very few foreclosure auctions that will really result to a successful sale. Hence, the property will then be reverted to the bank and will be tagged as an REO, or a real estate property owned by the bank.
When the property is now categorized as an REO, the bank has full ownership of the said property. The bank will then facilitate a scheduled eviction, and if necessary, may also conduct some repairs. The bank will also negotiate with the IRS to remove any existing tax liens as well as pay off any dues to the homeowner's association. So should you decide to บ้านมือสอง ราคาถูก purchase an REO, you will be given the opportunity to conduct an investigation of the property as well as receive a title insurance policy.
So to put things in better perspective, there is a chance you will get a significant bargain buying from foreclosure auctions but with the possibility of other complications such as eviction and tax liens, etc. Additionally, not all foreclosure auction sales are a bargain as they are hyped up to be. So better pay attention and do your own 'home' wok.
On the other hand, purchasing an REO property will mean avoiding any of those complications, which explains why most buyers prefer to purchase such properties.
Making an Offer
If you already have a property in mind, ask your real estate agent to get in touch with the listing agent and ask for the following information:
• Does the property have an inspection report? • Is there an "as is" form? • How long will it take for the bank to accept a purchase offer? • How will the agent deliver the said offer?
Most of the time, these offers are faxed to the bank, but the listing agents will require the original copies.
If you have already seen a great investment opportunity, then better act on it. Now is the best time to purchase and invest. A lot of people are also aggressively scouting REO properties on their own.
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