Buying a Bank Owned Property

REO Properties

REO properties are also known as Real Estate Owned properties, they are a type of property owned by a lender after a repossession and auction process. Properties become REO properties after their ownership transfers from the original owner to the lending agent, usually due to failure to make mortgage payments. Below are some  facts about REO properties. 

  1. What Makes a Property an REO Property?

    • A property is considered REO if it has been repossessed by the lending authority, and if that lending authority has been unable to transfer ownership of the property to a different, paying owner.

    How Does a Property Become REO?

    • A property becomes REO if a lending agent repossesses it, tries to auction it for the amount due on the loan and fails to find a buyer. At that point, the property becomes an REO property under the ownership of the lender.

    Who Owns REO Properties?

    • REO properties are almost always owned by the banks and other lending institutions, after repossession from a defaulted mortgage.

    What Are the Benefits of Having REO Properties?

    • To the lending authority owning the property, there is little benefit to owning an REO property, as it represents an investment gone sour, meaning, an REO property is real estate that can't be sold at auction for the minimal price of what was owed in the loan, so every REO property owned is property that came at a loss to the lender.

    Are REO Properties Available for Purchase?

    • REO properties are always available for purchase, and are often great deals. REO properties can be found by checking local Realtor listings.

The sharp down around in the economy opened up the foreclosure market.  Homeowners across the country were forced to leave their homes because they were not able to make payments on their mortgages, and the market  has yet to come back.  Now is a perfect time for home buyers because the bank foreclosured market is suddenly full with properties in many neighborhoods across the country. Purchasing a foreclosed home has its own set of issues, but the current foreclosure market pricing far outweighs any potential issues. The economy will eventually turn around, so obtaining title to a foreclosure property now will likely have increased value in the future.

MAKING AN OFFER

Before making an offer, have your agent ask the following questions:

  • Are there any inspection reports?
  • What work has the bank agreed to?
  • Is there a special "as is" form?
  • How long does it take the bank to accept an offer?
  • How does your agent deliver the offer?

Offers are usually FAXED to the bank. There is no formal presentation. Since there is no face-to-face presentation to the bank, provide the agent with a pre-qualification or a pre-approval letter Make your offer easy to accept.

If you are interested in purchasing a Bank Owned property please call Exit Realty Central @ 718-848-5900.

 

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