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Simi Valley - Moorpark Homes, Buying REOs

REOs Buying an REO in Simi Valley or Moorpark? I have bought two in my lifetime. Probably more down the road. Now that this will be a more regular course in our business for a while, here are some of the important issues to consider when purchasing an REO.

Who are you getting your Financing through? This may be the most important issue, because the lender you choose could cause you penalty fees if escrow does not close on time or your earnest money if they can't get you the loan they promised you. Loan brokers tend to have greater flexibility, but because the loan prospects have dried up with the declining markets, loan brokers are split into two camps.

The first, REPUTABLE HARD WORKING AGENTS, that will tell you up front the truth and they will not tease you with rates and terms just to get you to make application. I have quality referrals to this group.

The second, are THE CHEATS (scumbags). These agents are so far between paychecks that they will tell you ANYTHING. They will tell about incredible deals just to get you tied up with them. By the time you figure it out, it is usually too late and the loan docs you go to sign have rates and terms far different than what they told you or your loan is rejected after you have waived financing contingencies. I will turn this group into the Ventura County District Attorney's Real Estate Fraud Division

Direct Lenders can be slower and delays can cause you penalties to the Seller/Bank if you cannot close on time. Direct Lenders are quoting retail rates which are typically higher than the wholesale rates provided to loan brokers. Direct Lenders cannot shop your package to other sources if they cannot qualify you. A loan broker has the flexibility to go to multiple money sources.

A lender/loan broker that is willing to tell you the challenges of financing up front rather than throwing around teaser rates and specials may seem sexy (sexy is trouble); is where you should be. Real Estate investing should not be sexy, it should be a sound business. Remember, if it sounds too good to be true....it probably is a bunch of smoke and mirrors. Lending requirements are extremely tight and there are no Houdinis out there.

Inspections - Most REOs have winterized their properties. This is funny term for Simi Valley and Moorpark. This usually means that the water is turned off, gas is off and sometimes even the electricity is off. It will be hard for a Home Inspector to do a complete check with the utilities off.

Repairs - REOs are sold as is and usually priced low enough that repair requests fall on deaf ears.

Termite/wood destroying pests - If there has been an inspection done the Seller/Bank probably has not done the work and will leave it to the buyer. Simi Valley and Moorpark are areas where termites, dryrot, wood fungus and other wood destroying organisms can be a concern.

Unknowns - The Seller/Bank does not know the true condition of the property. Was the owner that lost the property to the bank upset enough to damage the property? The Seller/Bank does not know the anecdotal information that is native to certain tract, builders and neighborhoods in Simi Valley and Moorpark.

These are just a few of the things to consider when purchasing an REO. If you have been looking for a REO in the Simi Valley Moorpark areas, then give me a call, TEXT, email or Twitter

Posted by Ted Mackel Simi Valley Real Estate Simi Valley Homes, Simi Valley Realtor on 03/28/2008 11:45 PM

Comments (5)

simi valley, moorpark, homes, reo, ventura, ventura county, home inspection, loan, lender, bank, seller

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5 Comments on Simi Valley - Moorpark Homes, Buying REOs

Ted,

This is some good content, but boy, is it hard to read. My old eyes want something less colorful. But you're blogging, and that's the main thing. WELCOME to Active Rain! Much Success!

Mike in Tucson

03/30/2008 01:10 AM

by Mike Jones (Tucson Mortgage Company, LLC)

Thanks for the comments, I changed the font format a bit.

03/30/2008 01:30 AM

by Ted Mackel Simi Valley Real Estate Simi Valley Homes, Simi Valley Realtor (Keller Williams Realty Simi Valley)

I have a listing out in Simi Valley. Thank you for blogging this for our subscribers. Simi is such a great place to be. I work in Sherman Oaks and it's really not that far of a commute if you are lookign for a family lifestyle. My listing is on Presidio, such a beautiful area. Well, here's hoping you are having a GREAT day. =)

~Anita

04/01/2008 05:04 PM

by The Rich Group Keller Williams

What can you recommend to a couple seeking to buy a pre-foreclosure or a REO home??

And where is this formation posted?? or how do we acquire the listings???

05/22/2008 07:51 PM

by Gino

As an appraiser, its my job to make sure that the purchaser knows what they are getting into. HUD/FHA appraisals have gotten a lot easier but still give homebuyers a lot of detail on REO properties. Good luck Ted!!!!! Glad to see that you are keeping busy. Dawn

05/28/2008 03:22 PM

by Dawn Walker (Dawn Walker Appraisal Services)

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