Foreclosures and REO's What to Look for

Have you looked into buying forclosed homes as a way to make some money or maybe
just to get yourself a nice home at a cheap price? If you have, you may be
surprised to know that it's not as easy as you may think. Foreclosed properties
are often available for sale at a steeply discounted price. With that said,
buyers need to be aware that buying and living in a foreclosed property isn’t as
easy as it sounds. That is why some buyers rather opt for properties that are
referred to as REOs. These properties are real estate owned.

As previously stated, buying and moving into a foreclosed home isn’t always as
easy as it sounds. Some states tend to draw out the process, you need to know
that just because you are the winning bidder at a foreclosure auction, doesn’t
mean that you can move in right away. In fact, you may still end up with no
home. Why? Because many states have redemption laws. These laws gives
delinquent borrowers time to get their mortgage back in good standing.

It's also important to know that many people don't want to leave their homes.
While many will do so when faced with a legal eviction notice, you may be
surprised how many occupants put up a fight. In fact, there are even cases
where lawsuits were brought against the new buyers! If you are unable to afford
the cost of legal representation, foreclosures may not be in your best interest.

Liens and back taxes also need to be examined. Depending on the state in
question, buyers of foreclosure properties may be responsible for any outstanding
liens or back taxes. Don't let this come as a surprise to you after the fact.
If you're not careful, this can significantly increase the cost of a foreclosure,
possibly making it no longer affordable. For your own personal protection,
always consult with a professional before buying a foreclosed property, especially
at a real estate auction.

The buying of foreclosures can be considered a risky business, there are many
homeowners who opt to purchase real estate owned (REO) home or property. these
properties are owned by the original lenders. During this process, the lender is
commonly referred to as the investor. Often times, the lender in question will buy
back the home at a real estate auction. This is often done when not enough
interest in generated in the auction or when the bids are anticipated to be or are
low.

Many experts state that buying a REO home is the best way to buy a property that is
in trouble. Why? Because at this stage, the home is likely cleared of all
occupants. Financial lenders often have the means and the power to evict all
occupants, even those who are against leaving. The only individuals you should have
to deal with are the investors, which would be the bank. In rare events, a bank may
turn over the sale of the home to a real estate agent. However, since real estate
agents take a percentage of each sale, the asking price of an REO home is likely to
increase. For the best price, deal with banks directly.

How you can find real estate own properties? Visit all local banks in your area,
ask if there are any real estate owned properties currently available for sale. If
so, request information on those properties. The online websites of nationally
owned, but locally operated banks can be examined as well. Many times, REO
properties are listed for sale online. Remember, the same information can be
acquired by scheduling an in person meeting with the bank’s loan officer or real
estate advisor.

An important warning, whenever you are interested in buying a home, whether it be
through a traditional real estate agent sale, an REO, or a foreclosed property, never
enter into any agreements without the proper legal knowledge. Always hire or
consultant with an attorney who specializes in real estate or foreclosures.