Bank owned real estate is known as many things throughout the country. Agents will refer to it as R.E.O for "real estate owned" and consumers most likely know it as "Repo" property. Whatever you want to call it, bank owned real estate can present some excellent opportunities to home buyers and investors alike.
R.E.O. property is real estate that has been foreclosed upon by the lender or bank, brought to public auction where it was not purchased, and now is being sold by the bank through a broker with the consultation of an attorney.
Why Should I Buy R.E.O Real Estate?
Bank owned real estate is usually brought to market at a very attractive price in order to generate a quick response from qualified buyers. Banks do not like to own real estate and are usually looking to unload the properties as quickly as possible in order to mitigate their losses. This presents an excellent opportunity for consumers to capitalize and pick up some fantastic real estate deals.
What Are Some Things To Watch For With Repo Property?
You've got to imagine the mindset of the former owners of the home if you really want to understand one of the downsides of R.E.O. real estate. The previous owners probably did not leave on favorable terms and may have been vindictive toward the lender, the courts, and probably the entire real estate process.
As a result, buyers of bank owned real estate often find that many fixtures are damaged or even missing. The overall condition of the property will probably rate somewhere between fairly good to absolutely disgusting. Repo home buyers should not expect to find a sparkling, newly remodeled home, with all the latest decor. In fact, bank owned homes often only appeal to people with a good ability to see the potential in something. If you lack this foresight and vision, bank owned real estate may not be for you.
What Do I Need To Buy Bank Owned Real Estate?
With R.E.O properties, more so than any other kind of residential real estate, the guidelines for buying them are fairly clear and inflexible. Many banks have a standard Counter Offer that they send to all prospective buyers outlining their parameters. Here are the most notable of these very typical guidelines:
1) Repairs are rarely made to the property and no warranties will be granted.
2) Banks like a larger deposit than in a normal real atransaction.
3) Absolutely no contingencies for the sale of buyers property will be accepted.
4) In most cases, the price will deviate very little from the banks low asking price.
5) The buyer will need to close on a specified date or risk late penalties.
6) Termite reports or natural hazard reports are often purchased by the buyer.
Although most of these conditions are rather self-explanatory, a few have implications that R.E.O home buyers need to understand very clearly.
The first item means that repo buyers need to satisfy themselves with regards to the condition of the property. They still, however, will have a "no harm" period during escrow where they can have a professional inspector look at the property and decide whether or not they like the condition enough to continue. This is all without risk of losing their deposit.
The third item means that if the prospective buyer needs to sell some real estate in order to buy the bank owned property, they need to sell it first before the bank will even consider the offer. This is often a major hurdle but may not be an issue with first time homebuyers or investors.
Where Do I Find Bank Owned Real Estate?
Bank owneed real estate is not for everybody, but for those who enjoy getting a good deal, and are prepared to deal with some probable repairs, the benefits can be priceless! Home buyers in Orange or Los Angeles Counties, who are willing to tell us a little about what they are looking for, will find our Bank Repo real estate finder very helpful. People outside these areas can also contact us if they would like to be directed to a top R.E.O. specialist in their community. Here's to a good deal!