Things That Buyers Might Not Know About Bank Reo Properties
Homes become bank REO properties once they fail to sell at auction
. The good thing about REOs is that buyers can deal directly with the bank if they want to buy one of these properties. Most real estate owned homes are also free of existing liens and have a legitimate title which sometimes can be a problem with other types of foreclosed dwellings.
Longer Time to Close
A buyer of an REO home might not get hold of the property until after a month or two. Closing the deal is not as fast as purchasing a house from an auction or directly from the homeowner. In evaluating buyers' offers, several officials of the bank are involved and if one of them rejected the deal or found something missing, the buyer needs to start all over again.
For people who are looking for an immediate place to live in, REOs might not be the best choice. If buyers expect to occupy the home right after the agreement is signed, then they are mistaken. The process can drag on for weeks and even months and buyers will not be able to take over the property until all areas of the transaction have been worked out.
Repair Needs Might Be More
There is a general perception that bank REO properties are cheap and are easy to acquire because banks are eager to sell them off. The primary danger for a buyer lies in the potential to spend more than they expect on repairing the property to make it habitable. Buyers should remember that bank foreclosures are sold in an "as is" condition and that banks will not willingly let buyers in on the secret of how much repair is needed for the property.
Buyers who do not hire a licensed home inspector and who do not have the necessary skill to evaluate the structural condition of a residential property might find themselves spending a lot of money on repairs that they did not expect or planned for.
If a buyer is considering buying bank REO properties, he should seek the help of professionals like home inspectors, real estate agents and even a real estate lawyer. The fees that would be paid to them will be worth it if the buyer is able to avoid purchasing a home in a poor condition.