by Dan Wolf
on Friday, September 5th, 2014 at 7:50am.
Searching for a home is part of the Home buying process, but a seller doesn't own every home for sale. Some homes are in foreclosure, others are pending in court while the rest are real estate owned. REO, or real estate owned, is property that lenders, banks or credit unions own thanks to the previous owner defaulting. Like sellers, the goal of selling this property is to make profit. Unlike traditional housing markets, the seller has total control. You must play by their rules to score the chosen home.
Some steps remain the same. Title searches, home inspections and appraisals are still expected of these homes. Title searches determine if the seller owns the property fully without outstanding payments, court proceedings or other issues. Home inspections make sure the home is in good shape to move in. Everything on the surface and hidden underneath is examined thoroughly. Appraisals determine the current home value of the home based on inner and outer appearance. All is necessary to achieve a successful home sale.
In addition to the aforementioned, provide proof of mortgage. A preapproval or a final approval goes a long way toward scoring the home. Ideas on possible mortgage companies? The same lender who owns the home, a sister company or a third-party company are good places to start.
What's different is the condition of the home. Many REOs haven't had repairs in years. The seller is more interested in selling the home and curb appeal than the interior. Because of this, many homes are sold as is. Fixing the home is going to take extra money to renovate, revitalize and remodel to move-in standard. The bid goes through many channels and departments before it reaches the important people; have patience. White it takes a few days for an average bid this usually takes several weeks. Be prepared to pay for the seller's initial offering, as many are not willing to negotiate price.
Read the contract thoroughly. We are dealing with an experienced company that knows the ins and outs of real estate. The contract may contain an addenda, stipulations, contingencies and/or fine print agreements you are agreeing to when you sign. Always ask questions if you don't understand no matter how silly you believe they sound. It's better to be comfortable with every part of the contract than suffer from buyer's remorse. Get a second opinion from the realtor, your family/friends and/or an attorney.
Missed payments, foreclosures, unsuccessful auctions and failed short sales make good property like the one you want real estate owned. It's a different process but with patience and research, you'll get the same results - becoming a homeowner. Contact us for more information.