| Buying repo homes can potentially be the deal of a | | | | most attractive houses. |
| lifetime. Repo (or repossessed) homes are sometimes | | | | - The Ugly. Probably the biggest problem about buying |
| referred to as REO (real estate owned) homes. After | | | | repo homes is uncertainty about the condition of the |
| the homeowner defaults on payments, if the property | | | | house. Banks vary enormously in the way they handle |
| fails to sell at a foreclosure auction the property | | | | properties. Some will spend money on making them |
| reverts to the lender. | | | | more saleable (which of course puts the price up), but |
| - The Good. There are lots of benefits in buying repo | | | | the majority won't. Either way, you are buying the |
| homes. The title will be clear and you can be sure | | | | house "as is" - the work is determined and cannot be |
| there are no hidden liens to worry about. You can also | | | | changed. So although you do have the right to inspect |
| be confident that taxes will be up to date, and that any | | | | the house before making your offer, you cannot use |
| previous occupants have been evicted. Unlike buying | | | | any problems you may find as an argument for |
| at foreclosure auctions, you have the chance to | | | | reducing the price. You do have the right to withdraw if |
| inspect before you buy, and can go in at your own | | | | you find something really wrong - provided you do so |
| convenience. This makes the purchase process much | | | | within your contracted time frame. Make sure you find |
| less time-consuming. | | | | out in advance what this is, as if you get it wrong, |
| - The Bad. One drawback about buying repo homes is | | | | that's it. In fact, you are much better going for a house |
| that they aren't necessarily a great prospect as an | | | | that has NOT been repaired by the bank, as the work |
| investment. The lender will be under an obligation to the | | | | done by the banks is often "cheap and nasty" and the |
| shareholders, auditors etc.of the bank to get the best | | | | corresponding price increase is out of proportion. If you |
| possible price for the house, so it isn't necessarily going | | | | buy an unimproved house at a cheaper rate, you then |
| to be a terrific bargain or a prospect for a quick profit. | | | | have control over the quality of the repairs. |
| Your best chance of getting a bargain is if you watch | | | | Foreclosure can happen to anyone, not just the poor. |
| houses till they have been on the market for 30 days | | | | So whatever kind of house you are looking for, you |
| or more. The banks may then be more willing to drop | | | | can probably find one to suit you. Just remember the |
| their prices as the house will be costing them money | | | | three vital rules about buying repo homes: (1) |
| to maintain. Of course, these probably won't be the | | | | Investigate (2) Investigate, and (3) Investigate. |