How To Buy A Bank-Owned Home Or REO
Posted on: 19 March 2021
You might be considering buying a bank-owned home or REO and wonder if it's the right path for you. There is a risk associated with buying a foreclosed home that has now reverted back to the bank.
Bank-owned homes are those that the lender did try to sell at auction but no one bid on them, so the homeownership reverts back to the bank. There could be many reasons for this, and it isn't always the shape the house is in.
If you are considering buying a bank-owned home, there are a few steps to follow to ensure success. Here are just a few tips on buying an REO.
Find An REO Real Estate Agent
A real estate-owned or REO agent is your best way to finding bank-owned homes. There are some agents who only sell or help to buy bank-owned homes, so their expertise in this field is greater than a traditional real estate agent. You could search on your own as well, and there are many ways to find bank-owned homes, but your agent is a good partner to have.
They have a responsibility to protect your interests in the matter and to get you the best price possible. It doesn't cost you anything to hire an REO agent, as their payment comes from the seller through commission, so there is no financial risk to you to hire one. Plus, they have the skills to negotiate a deal and could get you a lower price than what the bank is asking for.
Find Homes That Have Been On The Market A While
It might not seem like the best idea, but if you want a good deal on a bank-owned home, then look for listings where the homes have been on the market for sale for a while. If you can find ones that have spent months on the market, you are more likely to get a good deal on it.
This might seem counterproductive and a potentially huge risk. After all, other buyers don't seem to want the home, and since you have to buy the home as-is, it could be in rough shape.
If you plan to flip the home, or you enjoy renovating and want to live in it yourself, a lower-priced home can give you flexibility in the funds you have for renovation. Bank-owned homes can actually be a good opportunity if you planned to gut the home and start over anyway.
Share