петък, 15 септември 2017 г.

Should You Invest In Bank Owned REO Properties

By Shirley Long


If you are in the market for a new home, chances are you are looking for the best deals available. You may have searched for a home through various publications or you may have searched online. If you want to know what are bank owned REO properties are, they are properties owned by the mortgage lender or bank often called real estate owned properties and often you can get a very good deal on these types of home.

A bank owned REO property is a property that is owned by the bank or mortgage lender that did not sell at a foreclosure auction. Often you can find these properties through a real estate agent, a multiple listing service MLS website or through local banks that have dedicated sections of their website for properties they own that are for sale. You can also find these properties on real estate service websites that list available properties for sale in your area.

If you are considering investing in a reo property, you should have it completely inspected by a qualified professional home inspector to assess whether the property has any damage to it that will need to be repaired. Many times these kinds of properties need extensive repairs that can be quite costly so having it inspected will save you any future heartache and trouble.

Rarely are REO properties considered to be in move-in condition but when they are the bank or mortgage lender may sell them at a premium price. You may be able to negotiate the pricing with the bank by getting them to lower the interest rate or discount some of the closing costs. Sometimes if you have the property inspected and they find that some repairs do need to be made you can then use this as leverage to negotiate a reduced price.

Since these are former foreclosure properties that did not sell at auction, the bank may invest in having some of the repairs to the property done in order to get it in saleable condition. They may also pay off any back taxes owed on the property and invest in any other repairs that need to be made in order to sell it. Their primary objective is to sell the property and recoup their overall investment in it. Many times, however, the property is sold on an as-is basis with no warranties to it.

Once you find a property that you are interested in you should perform your own title search to ensure that there are no liens or outstanding taxes owed on the property as you would be liable to pay them once you purchased it. Make sure that the title is clean and clear. Always do your own due diligence as the bank is not responsible for doing these tasks for you.

Sometimes the bank will offer these properties at a deep discount, it is still a wise decision to have it inspected to ensure that you are not buying a property that will cost more to repair that purchase it. Sometimes the total cost of the repairs can be included in your loan package so you need to ask the bank about what type of financing you can obtain for it.

If you qualify for a bank loan or other type of private loan, try to get the best interest rates available and if necessary work out the cost of any repairs that need to be made in your total loan package, that way you will not have to come up with out of pocket costs for any repairs that need to be made.




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