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What does "REO" mean? |
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Real Estate Owned. It's the term the banks use to identify their foreclosure properties.
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How is a HUD property different from any other foreclosure? |
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HUD homes are FHA-insured loan foreclosures. The government owns them. The properties are classified as "insured" or "uninsured". Those that are insured are in good repair and FHA will insure a new loan for a new buyer for the home. Uninsured properties are typically fixer-uppers, and the buyer will be responsible for his or her own financing. Call Paul for more information on this type of sale.
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How are foreclosure properties identified on the MLS? |
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Unfortunately, they are not. They are listed just like any other property. The best way to find them is by working with a real estate broker who specializes in this kind of home, or by searching the web.
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Does the amount owed on the property determine what the bank will sell it for? Won't the banks sell them for less?
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Not really. When negotiating with an asset manager at a bank for the purchase of a foreclosure, keep in mind that this is a professional seller. A good asset manager will work hard before a property is listed to determine fair market value. They order appraisals and hire a broker to advise them about the property's condition and value. Then, they price them accordingly. Often the amount owed on the property is actually far greater that its worth - which was likely cause of the foreclosure in the first place. Exceptions do exist though.
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Will the banks repair properties that are distressed? |
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Sometimes. The asset manger in charge of the property will confer with his broker prior to listing it to determine if it is a good candidate for repair or rehab. He will then proceed with a marketing strategy - either "as-is" or "repaired". The as-is properties are priced much lower, and the bank typically does not make repairs for these. They feel any repairs should be the responsibility of the buyer since the property's price is already discounted.
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What are some general guidelines for your market? |
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Many of the properties that we list require an earnest money deposit of $1000 and are sold "as is". Many REO properties will sell for cash. We have experience selling REO properties with all types of financing including FHA, VA, “hard money” and conventional financing. One should remember that many times an REO property will be in a somewhat distressed condition due to the former owner's financial position before the foreclosure took place. We have sold REO properties in a list price range from: $129,900 to $700,000+. The foreclosure market has a wide range of properties from which to choose. There are some excellent opportunities in this area and many pitfalls. Once again, an experienced Realtor in this area can make the difference and doesn’t cost any more. |
