People encounter various risks when making an investment but for real property
, bank REO foreclosures are just about the most secure option one can find. It probably has to do with the feeling of security when dealing with a bank. Banks always operate on the principle of transparency and are always on the level when it comes to their terms and their services. Real Estate Owned properties are no exception.
Bank REO foreclosures are essentially under the ownership of the bank after they have taken it from the former owners who has failed to meet their mortgage obligations. Banks exert extra effort to sell these homes as the business of home selling is not really in keeping with the general banking operations. An entire department is typically tasked to manage these foreclosed homes for sale. They effect minor repairs on the homes, clear up the titles and generally spruce up these properties to make them attractive to buyers.
Finding bank REO foreclosures is quite easy. Local realtors will have a listing of these homes, the homes will also be listed on the multiple listing service, online foreclosure listings sites will also have them, plus buyers can just walk up to any bank and enquire about foreclosed homes they are selling. If you have found a number of homes that you would like to consider closely, you should start touching base with the seller bank or their appointed representative and let them know that you are interested in their property. You should also immediately arrange for a tour of the property to let the bank know that you are serious about the whole thing.
Negotiations and Actual Purchase
If you are satisfied with what you saw you can make your offer. Your offer should take into account your findings during the inspection and the prices of similar homes in the neighborhood. At the minimum, banks would want to recover the entire portion of the unpaid loan to break even. Your purchase agreement should include terms like the power to pull out of the sale pending the findings of a formal home inspection. When the bank is amenable to your purchase agreement, a third party will handle the conveyance of the property to you, this is what is known as the closing stage.