Buying real estate owned (REO) properties is said to be the safest method to invest in foreclosures. This is because the bank erases all outstanding liens, judgments and obligations attached to the property once it claims the property deed. When you buy REO houses for sale, you do not have to worry about its title since the bank can deliver a lien-free good title. If you want to take advantage of this safe method, consider the following things.
Hire An Agent
If you are a newbie and have just started to dabble in the real estate market, hiring an agent will ensure that you minimize your risk exposure. Find one who has extensive experience when it comes to dealing with REO properties. They will most likely be able to provide you with the essential things to proceed with your transactions. The good thing about hiring an agent is that the seller is the one who pays them and this can be specified in a broker’s agreement between you and the agent.
When Making An Offer
When making offers for REO houses for sale, it is best if you look for properties that have been on the market for at least 30 days. This could give you a better bargaining position with the bank since they would most likely be aiming for a quick sale for the property in order to dispose it. However, when making an offer, make sure that you have secured your financial position prior so that you will have greater chance of being noticed by the bank. A preapproval letter attached to your offer and forms can signify to the bank that you are a serious buyer and have, in fact, worked out your financial data to conform to their requirements.
Read your purchase contract or addendum to the contract thoroughly to make sure that you are fully aware of any condition attached to the purchase. Ask a real estate lawyer to explain it to you if you are not confident about your understanding.
Also, do not haggle for the bank to handle the repairs, reports, and home warranty plans until after your offer has been accepted. Banks are not likely to entertain any request that will cost them any additional expense. Wait for a clear and better negotiating position before you make any request to the bank regarding REO houses for sale.
Lastly, respond to the bank as soon as possible. Once you have submitted your offer, expect a call from their REO department regarding your application. Sometimes, they may need some detail or additional paperwork and you must be available to respond promptly. Otherwise, you lose the chance of having the bank give your offer more than a cursory glance.