September 10, 2020
Are you looking to buy an affordable home? If you are, you may turn to foreclosure property listings online. 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 a walk in the park. For starters, some states tend to draw out the process. For example, just because you are the winning bidder at a foreclosure auction, it 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.
Next, it is important to know that many people do not 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 backed taxes also need to be examined. Depending on the state in question, buyers of foreclosure properties may be responsible for any outstanding liens or backed taxes. Do not let this come as a surprise to you after the fact. If you are 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.
Since 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. As for what these properties are, the original lenders own them. During this process, the lender is also commonly referred to as the investor. Often times, the lender in question will buy back the home in question 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 an 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.
As for 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 the banks loan officer or real estate advisor.
As 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 first hire or consultant with an attorney who specializes in real estate or foreclosures.