Top Secrets To Buying REO Homes For Sale

by on Foreclosures

REO homes for sale are properties which have already been placed in auction but for some reason or another, were not successfully bid on. When this happens, they revert to the bank’s or lender’s ownership, thus, the term REO or real estate owned. If banks are unable to dispose these properties within a reasonable time, they could be very disadvantageous to the bank since they would have to maintain all the costs necessary to keep a large inventory of foreclosures within their vault. But the same could be an advantage to the average buyer who would like to take advantage of every opportunity to their favor.

Asking The Right Questions

Of course, the most obvious reason why you have to ask the right question is the fact that REO homes for sale were unable to get successful bids in an auction. Knowing the reason why it was not sold at the public sale could give you a hint on how to deal with the property yourself. It will also provide you with clues as to the integrity of the property and will lead you to investigate whether the warranties and representations regarding the property is intact.

Conducting A Property Inspection

Inspecting an REO home gives you the opportunity to personally see the types of repairs that you would need to do in the property. It will also help you assess the amount of repair costs that might be necessary to make the property habitable. This is important since you would need to consider this cost in determining whether the property will still be a good investment after adding the cost of repairs and rehab. A property inspection is a must as this could help you formulate your decision in purchasing the property.

Knowing The Right Time To Negotiate

Of course, it is always good to negotiate for the price of repairs of the house. If you can the bank or lender to shoulder even some of the expenses or share in them, then that could give you a lot of savings in terms of purchase money. However, when negotiating for REO homes for sale, the best time is to wait until your offer has been met with positive response. This is because bargaining hard even before your offer has been accepted can turn off the bank and could only be detrimental to your success. It could even send your paperwork down at the bottom of the pile.