Buying a property that is owned by a bank or in foreclosure can lead to substantial cost savings. Utilize these suggestions to locate discounted real estate-owned (REO) properties available for purchase.
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Perform Internet Research for Listings of REO Properties
The first step involves thorough online research to identify current listings of real estate-owned (REO) and foreclosure properties in your desired locations. Various websites like RealtyTrac.com, HomePath.com, and Foreclosure.com aggregate up-to-date REO and foreclosure listings from different banks and lenders into a single, searchable database.
Examine the listing details, including property photos, square footage, the number of bedrooms and bathrooms, available amenities, property age, school district information, neighborhood descriptions, and the listed price. If a property catches your eye, consider driving by the address to visually inspect its exterior condition and street appeal. To stay updated, you can also subscribe to listing alerts on aggregator websites, ensuring you’re notified immediately when a new property matching your criteria is listed.
This initial online research phase provides you with valuable insights into available REO properties and pricing trends in your city, offering a solid foundation before engaging with real estate agents. It equips you with knowledge of emerging opportunities and market inventory.
Keep an eye on local newspapers for foreclosure notifications
Enhance your research strategy by consistently keeping tabs on your local newspapers’ legal and foreclosure notices sections, which are accessible both in their print and online editions. These notices serve as valuable resources for identifying properties in the early stages of foreclosure, such as those entering initial mortgage payment defaults or being repossessed by lenders and scheduled for upcoming public foreclosure auctions.
Participating in these auctions necessitates prior financial pre-approval but provides the opportunity to bid on properties before they officially transfer to the bank. However, it’s crucial to note that engaging in auction-based purchases is generally advisable for experienced investors, as it involves a rapid timeline and legally binding contracts. Nevertheless, closely monitoring these notices allows you to pinpoint properties that are on the brink of transitioning into bank-owned real estate (REOs).
Furthermore, your diligent newspaper research can reveal distressed homes poised to enter the market, some of which may not have been listed on real estate websites yet. Identifying these properties at an early stage in the foreclosure process grants you a competitive advantage over other prospective buyers, offering you a head start in securing potentially lucrative real estate deals.
Harness the expertise of real estate agents with a focus on REOs
In addition to conducting your own research, it’s advisable to reach out to local real estate agents who specialize in dealing with bank-owned REO properties. These experienced REO agents have established strong relationships with lending institutions, which grants them early access to exclusive REO listings, allowing them to promptly notify their clients.
When you find a specific REO property that captures your interest, a knowledgeable agent can provide invaluable assistance. They can keep you informed about any upcoming open houses, walk you through the complexities of participating in foreclosure auctions, negotiate effectively with the bank on your behalf to secure favorable pricing, and handle all the necessary purchase paperwork. Relying on the expertise of the right agent gives you a clear advantage over attempting to navigate this intricate process on your own.
To identify the ideal agent for your needs, consider interviewing several REO-focused agents. Inquire about their connections with banks, delve into their track record in successfully securing REOs for buyers, and assess their experience in managing the unique aspects of purchasing distressed properties. Additionally, check online reviews to gain further insights. The selection of the right agent can significantly influence your success in this endeavor.
Examine the inventory of REO properties accessible through bank websites.
Many major lenders, including Wells Fargo, Chase, Bank of America, and others, have dedicated sections on their websites specifically for real estate-owned (REO) properties. These sections showcase properties that the banks have repossessed and are currently offering for sale. By exploring these bank websites, you can gain early access to REO listings before they become widely available through other channels.
Bank websites typically provide comprehensive details for each REO property, including property specifications, photographs, neighborhood descriptions, and asking prices. If you discover a property that piques your interest, you have the option to directly contact the bank’s REO sales department. They can provide information on viewing the property in person, submitting an offer, and guiding you through the purchasing process without the need for a real estate agent.
While this approach involves a more hands-on DIY process, it can save you from having to pay agent commissions. Moreover, REO properties sold by banks often come with competitive pricing, frequently listed at 10-20% below comparable fair market values in the area. Keep in mind that due to the attractive pricing, it’s crucial to be prepared to act swiftly, as knowledgeable buyers tend to seize well-priced REO opportunities promptly.
Conclusion
Purchasing a bank-owned REO or foreclosed property requires thorough research and preparation, but it can yield significant savings compared to the standard housing market. Start by researching online aggregator sites and monitoring local newspapers for early foreclosure notices. Experienced real estate agents can provide valuable insights, and don’t forget to check bank websites directly. When you find a promising listing, act quickly, be prepared to bid competitively, and, with diligence and speed, you can secure excellent deals, potentially saving tens of thousands compared to non-distressed properties.
