| So you want to buy a bank owned home? One | | | | agree to inherit all tenants currently living at the |
| morning, while driving to work, you're listening to the | | | | property and other liens against the property. Since |
| radio and all of a sudden a voice comes on that says, | | | | what is owed to the bank it is almost always more |
| "Do the bank a "favor" and help yourself to a deal in | | | | than what the property is worth, very few foreclosure |
| the meantime." Your interests are peaked and you | | | | auctions result in a successful sale. Then the property |
| hold on to every word long enough to remember the | | | | "reverts" to the bank. It becomes an REO, or "real |
| 1800 number as your entering your office. If you're like | | | | estate owned" property. |
| most people, a bargain is a bargain, and who wouldn't | | | | When the property is being sold as an REO, the bank |
| jump at an opportunity to save money or make some | | | | will hire a realtor and in some cases, evict tenants and |
| money for that matter? But then, reality sinks in and | | | | perform their own inspections and or make minimal |
| you recognize that you know nothing about | | | | repairs. All banks work differently but most will want to |
| foreclosures or Real Estate Owned (REO) properties. | | | | sell the property in the "as is" condition. |
| The following article will help to clarify and point out the | | | | You can place an offer with an inspection contingency. |
| differences between REOs and Foreclosures so that | | | | You are entitled to as many inspections at your |
| you can understand the buying process and what's | | | | expense and can terminate sale if the inspection |
| involved with banking bank owned homes. | | | | reveals unanticipated damages that the bank will not |
| First, the difference between an REO and a | | | | correct. Prior to your offer being accepted, the bank |
| foreclosure can be understood by analyzing who's | | | | has to demonstrate to the shareholders that they are |
| involved in the selling. If there is a trustee or a | | | | doing everything they possibly can to get the best |
| foreclosure auction, the owner may not have had | | | | price possible. Thus, they will most likely counter your |
| enough equity to sell the property, pay for a real | | | | offer before or after you perform your own |
| estate commission and all other fees associated with | | | | inspections. Don't be surprised if the counter is |
| selling. In which case, at a foreclosure auction, you | | | | substantially higher than the list price. This is where the |
| should have a cashier check in hand for the loan | | | | rubber meets the road. Do not get into a bidding war |
| balance, interests, attorney fees and other cost | | | | and pay over market value. You also have to consider |
| associated with the foreclosure process. | | | | the cost of renovations and time frame for repairs to |
| When you buy a foreclosure property, you almost | | | | help you determine if it's still a bargain. |
| always agree to buy it in the "as is" condition and you | | | | |