Sourcing Bank Foreclosures and REO Properties
Whether you're in the market for your first new home or your tenth, you'll discover that there are a lot of new options available to prospective home buyers. You'll find traditional buying options, online home auctions, and other choices a realtor can explain to you. One buying option you may not have thought of, though, is that of bank REO sales.
If a bank fails to sell real estate at a bank foreclosures auction, the bank will commence an REO (real estate owned) sale. When the initial sale fails, it is usually because the bank wants more money for the property than the market was willing to pay at auction. However, when a property fails to sell at foreclosure auction and becomes an REO property, the bank will often accept a lower price in order to move the property. Normally a real estate agent will sell the property, but alternatively another auction could be held.
When buying bank foreclosures, make sure to pay close attention to the state of the property you are buying. Many bank foreclosures, although they have low prices, are in need of repairs or maintenance. In many cases, these repairs may be easily done without cutting too much into your profit margin, but there will be some properties you will want to pass up because the associated repairs are too costly. Be prudent but also don't be afraid of the repairs because that's often where the big profits lie.
There are several places that a prospective or current investor may find bank owned properties. First of all, banks themselves often have search tools on their web sites where you may search for a property in your location, or the location you are interested in. These sites generally let you filter your search by price, amenities, and other factors.
Third party listings are also a good source to find countrywide REO properties. There are a multitude of independent and third party websites that will also give information about these properties to you. As always, be careful with these web sites. Most sites are legitimate, but not all. Use careful judgment when using third party listings.
When you bid on any real estate owned property, the bank will probably respond with a conuter offer. There will be bargaining involved, so keep that in mind what determining what price you intend to bid. Make sure that you mention any repairs that you intend to make during the negotiation process. When you actually purchase the property, you will get a title insurance policy. It is important that you avoid paying too much bcause you have become obsessed with winning the bidding for a property. Keep your head, and you will do fine.
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About the Author: A critical element to real estate investing is having a source for great deals. One option that you may not have looked into is that of bank owned real estate or REO properties. If a bank fails to sell its "bank foreclosures" at auction during the foreclosure process, it will commence an REO sale and this is where bargains can be had. Banks like to get rid of the property they own quickly;
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