The REO fallacy.
Are you looking for a great deal in an investment property. Or the quintessential flip? All you have to do is check the foreclosures online and in every paper and arrive at the auction. Yeah right! How many auctions have ended up with a non bank buyer?
Okay, well I see them on the market all the time now. They must be cheap, they are bank owned. Nope, the bank wants fair market value, just like any seller of property.
Today's market has substantially increased the foreclosure market. Right now this market is just a blur. A lot of buyers are waiting it out to see how far the market will fall. (This is happening in most markets, not just foreclosures) The foreclosures that are being sold by the banks are still rather high priced.
So how can I, as a consumer, get a good deal? Well, for one, you can work with a Realtor that handles REO's. One who knows because they are working with the banks, what property will be going on the market soon and what the criteria is for the bank to work with you. You need to understand that putting an offer on a foreclosed property is not the same as a regular owner sold house. There are many stipulations that the bank wants followed and will not even look at your offer without these stipulations being fulfilled. Another thing to consider is that a lot of these properties will not qualify for some mortgages that you may have planned on applying for.
Your best bet, if interested in a property that maybe needs a little work, (or in some cases) a lot of work, is to call a Realtor and get all the information you need.
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