| Did you know that the average California REO home | | | | mortgages began to increase, the markets were soon |
| is currently priced at roughly $234k? Interestingly | | | | flooded with homes lost to the foreclosure process. |
| enough, the April 2009 median home price in the state | | | | The California REO market is no different from those |
| stood at roughly $248k. Clearly this means that buyers | | | | all over the country, and there are many homes that |
| looking for a bit of a deal might be able to find homes | | | | are now in the hands of financial institutions who are |
| at seriously reduced rates. While you might be | | | | slapping on price tags that keep the properties in a |
| scratching your head and saying, "yeah, but that is only | | | | range that is realistic with their appraisals and their |
| a $15k difference?" it is important to note that REO | | | | location. This doesn't always mean that such homes |
| properties vary from the luxurious to the average, and | | | | are being sold for the same, and usually higher, prices |
| the median home will always remain a somewhat | | | | as their neighbors, which translates to some serious |
| static entity. | | | | opportunities for those in the California REO market. |
| What does this mean? Well if you are looking through | | | | Before actively engaging in the search, however, it is |
| California REO listings you might find that a home that | | | | best if you make friends with a licensed home |
| would have been selling for five or six hundred | | | | inspector, and also discuss the matter with your |
| thousand dollars only a year or two earlier is coming in | | | | attorney. This is because a home that is in the hands |
| at that state average of roughly $250k, while a | | | | of a bank or other financial institution is usually sold |
| standard consumer listing might still remain at a much | | | | under the terms of "as is". This means that the seller is |
| higher price. This is because REO properties are | | | | under no legal obligation to discuss or reveal any |
| owned by banks, and while they would like to convert | | | | problems with the property, and the potential buyer will |
| such assets into ones earning income, they are still | | | | have to pay for a thorough inspection "out of pocket" |
| unwilling to sell them at less than their market value. | | | | if they hope to discover items that could quickly turn |
| We have all watched as real estate prices dropped, | | | | their "deal" into a disaster. |
| and most of us had already been wondering when | | | | While some California REO properties may have been |
| such a decrease would come. After all, most people in | | | | maintained and repaired by a bank, not all will have |
| the country lived in or near neighborhoods where | | | | been able to receive such beneficial treatment, and |
| prices were seriously over-inflated and entirely | | | | though the banks will handle all foreclosures as |
| unrealistic. This was due primarily to the wide availability | | | | valuable assets, some may have not been as well |
| of subprime mortgages for those who could not | | | | tended as they should have been. Naturally, this doesn't |
| otherwise afford the loans taken against their homes. | | | | mean that they are not an excellent deal, and many |
| When values began to drop and interest rates on | | | | happy transactions occur from an REO situation. |