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AgentsWhen making an REO purchase, it is important to understand market value in your chosen area. REO offers are usually FAXED to the bank because the listing agent needs your originals and there is no formal presentation so keep in mind nothing happens evenings and weekends because banks are closed. REO, or Real Estate Owned, is property that failed to sale at a foreclosure auction and is now owned by a bank. The last downturn in the real estate market created many millionaires who were able to buy and hold cash flow positive REO properties. The majority of recent closed sales in Southern California are REO wholesale purchases. Lenders for incoming home buyers are forcing appraisals downward based on the sales data created by REO home sales, which are often in poor condition and not reflective of market value. Lenders are flooded with foreclosures and aggressively slashing prices on REO foreclosed homes. A short sale is a purchase made from the bank at less than the full owed amount. Many investors get discouraged with this process as it can take many months for the bank to accept or not get accepted at all. Dead grass and landscaping are targets for citations from code enforcement on REO held property. Many factors must be taken into account when determining market rent in a declining economy. HomePath Mortgage Financing is available on Fannie Mae homes and the benefits may include low down payment and flexible mortgage terms fixed-rate, adjustable-rate, or interest-only. A loan prequalification for an REO purchase doesn't mean your loan is approved. You must apply for a loan separately, after you are prequalified and your purchase offer is accepted. REO listing agents are typically top producing agents because of the volume of business they conduct. REO Homes, because they’re sold in “as-is” condition, can often be a great, affordable opportunity for the fixer-upper. One of the best advantages of buying REO properties is most of the REO property is below market value. Another advantage is REO properties is very easy to find, banks have a number of them and will love to sell them. Ask a group of real estate millionaires how they made their money and most will recite some version of this axiom When everyone zigs, you zag. In today’s downward real estate market the axiom simply translates into buying property when most others are not and that’s exactly what REO buyers in Southern California are doing. It is important to consider quality when buying an REO in this market. A quality home in a quality area in good condition will produce a higher quality renter and improve vacancy rates, cash flow and appreciation over time. This may be more costly initially and take more work to find but will pay dividends at the end of the cycle. The current REO market in southern California has shown a recent drop in inventory and that has created a price increase. An REO is a property that has been foreclosed on and has reverted back to the ownership of the bank or lender. Do a Google search for 'Real Estate Owned' or 'REO'; this will give you a list of websites where you can find bank owned properties. These are the terms that lenders use to describe properties that they repossessed though foreclosure and they are more than egger to get rid of them. Also it's a good idea to scan through your local classifieds for ads that contain one of the following: 'motivated sellers', 'handyman special', 'needs TLC'. |
