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Call (888) 319-3789 to Get a Bank-Owned REO in Southern California
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Featured Topic - Houses For Sale Network
Featured Topic: REO
The time required to purchase an REO is generally much shorter than a short sale as REO's will already have a list price that the bank has agreed to.
As a purchaser of an REO property, the buyer will receive a title insurance policy and the opportunity to investigate the property.
Fannie Mae guidelines allow investors to buy up to 10 investment properties. This is an excellent opportunity to build a portfolio of cash flow REO houses.
The purchase and hold of an REO rental property in Southern California real estate market can create some great tax benefits for the investor.
REO agents must follow up diligently on offers made in their buyers behalf as many properties have a stack of offers submitted.
Just because an REO has a low list price does not mean it is a great deal relative to current market value.
Making an offer subject to a partners inspection, lenders approval of financing, contractors estimate of repairs or any other clause meant to provide you with an exit can cost you the deal.
Many homeowners are very angered by the foreclosure process and cause physical damage to the REO property prior to leaving.
Some areas to pay attention to when inspecting an REO for water damage are around the bathrooms, water heater, solar equipment, water softening equipment, attic spaces and under the kitchen sink.
Savvy investors take care to preselect good neigborhoods, location and configurations that would be desirable for family living when looking for REO cashflow opportunities.
Usually, when you buy a home, you deal with a seller who lives in the home. Fannie Mae has acquired their properties through foreclosure, deed in lieu of foreclosure, or forfeiture.
Fannie Mae depends on the expertise of local real estate sales professionals and accepts offers only through their real estate listing agents. You may work with any real estate sales professional to submit an offer to the real estate agent who has listed the REO property.
REO listing agents make money by either selling a lot of REOs or operating as a dual agent. Under dual agency, the REO listing agent will earn both the listing commission and the buyer's agent's commission.
Buyers with all cash are REO lenders' favorite purchasers. A list-price all-cash offer will beat out a conventional offer, even if the conventional offer is above list price. If the listing's conditions state "cash buyers only," it is unlikely the bank will consider an offer from any buyer who is relying on financing.
Buying an REO is not the same as buying a home through the normal channels.
The bank will not do or pay for any repairs on REO's in many cases. You will be buying the REO property as is. Make sure your offer includes an inspection contingency that allows you to withdraw if the inspections reveal significant problems.
In search of a rental portfolio in a down market, many savvy buyers will enlist he services of and REO expert who knows the area, listing agents and inventory well. That way they can make multiple purchases and pick up the right inventory. The REO expert will be compensated with a wholesaling fee.
REO tip....take extra care to estimate repair costs on the lower priced inventory. There is usually a reason for the low list price and many times it is a costly or loan killing defect.
Short Sale versus REO: Big difference! If you make an offer on a home that is potentially a short sale, you will work with the seller and the bank, with the bank (or banks) being ultimately the decision maker on your deal.
Because of all the unknowns and requirements with foreclosure auctions many people prefer buying an REO. The REO option offers many more benefits and less stress than the foreclosure auction
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