| The evening news is full of stories about the huge | | | | know before he makes an offer on the property in |
| number of home foreclosures that are plaguing our | | | | order to protect himself and get the best price |
| country today. Most of these properties do not sell at | | | | possible. First he needs to know what similar properties |
| foreclosure auctions because the former owner owes | | | | in the same area are worth. He doesn't want to pay |
| the lender more money than the property is actually | | | | more for the property than it is worth and the market |
| worth. This has become a common occurrence which | | | | value of the homes in the area play a part in |
| results in the lender ending up with the property. These | | | | determining this. |
| are known as REO, or real estate owned, properties. | | | | Next he needs to be aware of any repairs that need |
| The goal of the lending institution is to get these | | | | to be made. Sometimes when owners know their |
| properties off their hands as fast as possible, which | | | | house is going to be foreclosed on they fail to perform |
| means an advantage for the potential buyer. This is an | | | | routine maintenance and repairs. Since banks usually |
| excellent way for a family to buy a house or an | | | | sell REO properties "as is", the inspection made by the |
| investor to purchase property that they can turn | | | | potential buyer is very important. They need to have |
| around quickly for a profit. | | | | an idea of the cost of making repairs before they |
| Before you go out and make an offer on a REO | | | | determine the amount they are willing to pay for the |
| property, there are some points to consider. First off, | | | | house. Also, if any unexpected damage is found that |
| these properties are usually turned over to a specific | | | | the bank won't repair, the potential buyer has the right |
| department of the lending institution or to REO brokers | | | | to back out of the sale. |
| who assist with the sale of the property. The REO | | | | And finally, if the potential buyer is planning to buy the |
| brokers give their opinion on what the price of the | | | | property as an investment, the purchase price needs |
| property should be and perform an inspection to | | | | to be far enough below the market value and the cost |
| ensure the property gets the highest rating possible. | | | | of repairs must be low enough to make it worth his |
| The sale process starts when the potential buyer | | | | while. Otherwise, he will just end up losing money. |
| makes an offer on the property, which the lender will | | | | It is possible to get a great deal on REO property, but |
| counter with an offer of their own. This goes on until | | | | potential buyers need to remember these points so |
| the buyer and the lender can come to an agreement | | | | they can successfully deal with REO brokers and |
| on terms for a sale. Then the contract is drawn up. | | | | lending institutions who want to get rid of these |
| Now we'll discuss what the potential buyer needs to | | | | properties quickly and for the highest price possible. |