Whether you are searching for a new or second home or looking to seriously get into real estate investing, you will undoubtedly soon find out that there are several options available to you. From traditional buying options to auctions and more, the possibilities seem to increase every day. One option that you may not have looked into is that of REO property.
Bank REO sales occur when a bank is unsuccessful in selling a bank foreclosure property at auction. This usually happens because the value of these properties is less than the amount owed to the bank. In such a case, the bank will attempt to sell a property without auction, generally at a lower price. This is usually done by employing a realtor to sell the property.
When purchasing home foreclosures, ensure that you pay close attention to the condition of the property that you are buying. Some home foreclosures, although they are inexpensive, are in need of maintenance. In such cases, these repairs may be done without cutting too much into your profit. So be careful of major structural problems but realize that houses needing some work are often where the big profits are hiding - that's why you can get them for a bargain.
There are several places that a prospective or current investor may find bank foreclosures. First of all, banks themselves often have search tools on their web sites where you may search for a property in your location, or the location you are interested in. These sites generally let you filter your search by price, amenities, and other factors.
Other ways to find bank owned homes include going to third party listings. There is a proliferation of independent and third party Web sites who will also provide information about properties. With all Web sites, however, be careful. Many of these sites are trustworthy, but not all are. Use your best judgment when dealing with third party listings.
When you make an offer on a real estate owned property, the bank will usually make a counter offer. Plan for some bargaining to get a price that is acceptable to you. While negotiating, be sure to mention any repairs that are needed. Upon buying, you will get a policy for title insurance. Above all, do not fall into the trap of being so fixated on a particular property that you end up paying full price or more. Think things through, and you'll be set.
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A critical element to real estate investing is having a source for great deals. One option that you may not have looked into is that of bank owned real estate or REO properties. If a bank fails to sell its "bank foreclosures" at auction during the foreclosure process, it will commence an REO sale and this is where bargains can be had. Banks like to get rid of the property they own quickly; since they are not in the business of owning real estate it is unprofitable for them.
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