Reposting from Ratenerd.com - click here to see the original post.
If you’re looking for a great deal on a home, check with the bank. Due to high foreclosure rates, banks have tons of inventory they want to get off their books. They wont give it away for nothing, and you need to make sure the property has not been stripped to the bone, but bank foreclosed homes for sale are a great deal.
Bank websites have their foreclosed home inventory available for you to search – if you want to find bank foreclosed homes for sale, two of the largest are Chase Bank Mortgage and Bank of America Home Loans.
Banks holding REOs (Real Estate Owned) are pretty easy to deal with. Typically, the property is listed through an agent who may have an asset management company between them and the actual lender. In this case, you can make an offer through your agent or the listing agent and receive a response in a day or two.
Short sales are entirely different and much more difficult. Banks require proof of hardship of the home owner in order to consider allowing a short sale. This usually requires extensive document gathering from the distressed homeowner, followed by a lengthy 2-3 month review period from the bank with no guarantee that the short sale will be approved. This doesn’t mean short sales aren’t worth pursuing, just be prepared to wait for answers and be patient.
How to Buy a Bank Owned Home (REO)
- Know Why You’re Buying. Do you want cash flow or appreciation? Let the math dictate the offer price and know how far you are willing to deviate from your baseline. Real Estate investing is too important to do based on feelings or hunches, if you don’t want to crunch the numbers, work with someone who will.
- Line up your financing. Timing counts when buying REOs. There are other investors looking at the same properties so a deal for you is probably also a deal for a dozen other investors. There are bargain hunters in every market so you must be prepared to act when the right deal comes along.
- Stay Focused. Don’t be disappointed by rejection or failure. It’s called a buyer’s market for a reason; other opportunities will come along as long as you aren’t too busy moping over the one that got away.
- Make An Offer They Cant Refuse. Write a clean, straightforward offer. Put down at least 1 percent, have reasonable straight forward contingencies, have your financing ready and show you are willing to close in a reasonable amount of time.
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