Recently I have seen a large upsurge in the number of buyers approaching me about purchasing REO properties.  Until recently, I preferred to not work with buyers.  Most of my sales come from listing REO homes for banks and that keeps me quite busy.  However, I came to realize that with my specialized knowledge I could help buyers navigate this tricky market as well.

What many buyers do not realize though is that not every buyer is ideal for an REO property.  If you match any of the following criteria, REO properties are probably not for you.

1) You are not exactly sure of what you want.  Given a nice home, you are not sure whether it is your ideal home or not.  You want to see a great number of homes before making your decision.  You figure that when you find the right house, it will stay on the market for awhile so you can see a lot of other houses.  After seeing those houses, you may go back to this house to make an offer.

2) You are not financially and mentally prepared to buy now.

3) You are not prepared to do some work on the home - for instance install appliances that are missing.

4) You are afraid that the bank does not disclose any defects about the home (because it does not know about them) and therefore you may buy a home that has problems.

There are two types of REO properties - overpriced ones and well priced ones.  Most people tend to shy away from the overpriced ones.  Well priced REO properties, on the other hand, do not stick around for long.  They often receive many offers and buyers need to be prepared to move quickly on them.

If you are not prepared to jump when the right property comes up, then my recommendation is to clear your mind of getting a great deal of an REO property.  By the time you make your decision to purchase it, the property will already have closed.