With the rise in foreclosures in the Colorado Springs real estate market, many of our buyer clients are finding homes that they want to buy that are now Bank owned. These properties are also known as REO (Real Estate Owned) homes.
A bank owned or REO home in Colorado Springs means that the home went through the entire foreclosure process and are now owned by the lender who originally held the mortgage. Similar properties include:
- VA Repo Homes in Colorado Springs: These are homes that were mortgaged by a VA (Vetran's Affairs) Loan. When the home foreclosed, the VA reclaimed the home and is now trying to sell it to recoup some of their losses.
- HUD Repo Homes in Colorado Springs: These homes were reclaimed and now owned by HUD - Housing and Urban Development.
Writing offers on a VA or HUD Repo home requires more paperwork and different processes than writing an offer on a bank owned or REO home for sale. This article is aimed at writing offers on Bank Owned and REO Homes.
I was just reading an excellent post about this, over on Agent Genius: 20 Things You Should Know When Writing on a R.E.O. Property. (MUST READ)
This post is written by a former Foreclosure Team Leader and Senior High Risk Property Analyst at J.P. Morgan Chase default department. Rocky has explicit knowledge about what it takes to successfully write an offer on a REO or Bank Owned home.
Some of the things that he targets in this post, include:
- Patience: If you are looking to buy a Bank Owned or REO home in Colorado Springs, be prepared to wait a week or 2 for an initial response, wait another week or so for a fully signed contract, and wait however long it may take to settle on a final closing date.
- Thoroughness: Make sure that you are working with your Colorado Springs Buyer Agent to submit a complete offer with ALL needed addendums, disclosures, etc. Otherwise the bank may ignore you and your offer completely. They are too busy to look at incomplete offers. Also, make sure that your funding is in order, and that you have a pre-approval letter (or better yet an APPROVAL letter from your lender) that you can submit with your offer.
- Responsibility: A bank will NEVER agree to fix anything. Most bank owned and REO homes in Colorado Springs are sold "as is" ... This does NOT mean that you cannot GET an inspection. It just means that you cannot request anything to be fixed. As a home buyer, you will need to take full responsibility for inspections and repairs. Or, if after an inspection, you are not comfortable with the condition of the home, talk with your real estate agent about cancelling the contract.
- Reward: If you are patient, thorough and responsible, chances are you will be the proud new homeowner of a home for LESS than market value - taking advantage of the current real estate market and the fact that Banks are NOT in the business of owning homes. They would rather sell them FAST for less money.
This post is packed full of great tips and information, so make sure you check it out! 20 Things You Should Know When Writing on a R.E.O. Property.
Read Also:
For more information on writing an offer on a bank owned or REO home, contact the Wagner iTeam: 719.434.7525 or Team@WagneriTeam.com
Posted By: Mariana Wagner - Colorado Springs Real Estate Agent - Wagner iTeam
The Wagner iTeam is a power team of Keller Williams Clients Choice Realty,
specializing in Colorado Springs Real Estate and Monument Real Estate
719.424.7525
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Mariana - very useful information, and thanks for the original article link. Took a look at that too. I have found in several recent cases that the REO seller is requiring that the pre-approval be from a direct lender.
Jeff