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Enter Your Info Below To Find "The Right" REO:
Featured Topic: REOREO stands for Real Estate Owned and refers to a property that has been returned to a bank or lender in a foreclose proceeding. As a purchaser of an REO property, the buyer will receive a title insurance policy and the opportunity to investigate the property. FNMA is offering special financing on their REO inventory properties. The benefits of Fannie Mae Home Path Special financing include low down payment and flexible mortgage terms. A great way to buy and keep an REO home in Southern California is to rent it out during the downturn and let the renter make your mortgage payment. If care is taken in the analysis of these purchases, a great profit can be realized in monthly cash flow and equity growth over time. In experienced REO buyers that can not follow through on their offers, make many agents leery of working with investors. Many REO investors rely on the opinions of inexperienced buyers agents to formulate their offers. These agents are often desperate to make a sale and do not understand market value or cash flow analysis. The only time the deposit check is cashed in an REO offer is when the offer has been accepted. 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. It is critical that investors not be discouraged by Real Estate agents who speak negatively about creative REO buying. Many times they are just not familiar with the subject. When calculating monthly cash flow be sure to include tax, insurance, management, municipal fees and vacancy costs. If Fannie Mae knows of any hazards on REO properties they own or market, they disclose this information through their real estate listing agents. However, they may not have been informed by the previous owner of all hazards. They encourage you to have the property inspected by a professional before you buy. 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. The bank may ask for you to submit a loan application so it can prequalify you for an REO, however, you are not obligated to obtain your loan from that bank. REO properties have properly changed hands. All liens against the property have been addressed. Back taxes have been paid. And the title is clear. In some cases, the bank may have done necessary repairs already. The REO offer process in many ways is less complicated, there is little to no emotion on the part of the seller the REO lender, and deals can be completed much more quickly. RealtyTrac released its mid-year 2009 U.S. Foreclosure Market Report Thursday, which shows a total of 1,905,723 foreclosure filings including default notices, auction sale notices, and bank repossessions were reported on 1,528,364 U.S. properties in the first six months of 2009. That figure represents a 9 percent increase from the previous six months and a nearly 15 percent increase from the first six months of 2008. While you may get outbid on a new piece of REO inventory by a first timer, it can be beneficial to evaluate and track the house. If and when it falls out of escrow, you will be poised to make a quick offer and the bank will be in more of a wholesale mood as time goes along. REO tip...When comparing recent sales to your subject property, be sure to make adjustments for differences in square footage. A common misconception is that foreclosures and REOs are the same. Although they are similar they are in fact different with the REO being the direct result of a foreclosure option sale. An REO is a property that has been foreclosed on and has reverted back to the ownership of the bank or lender. If you've been looking at foreclosures but are unsure whether you want to risk your money on a property you can't inspect or know what might be hidden behind the low price, you might want to consider a real estate owned property. Real estate owned (REO) properties can be a better option for people who want to have all the information before deciding to buy. |
