The single most important choice next to buying the right REO home is finding the right Realtor to represent you. Tri County Residential knows REO!
Tri County Residential Group believes in the power of homeownership and the stability and strength that it brings to our communities. The foreclosure epidemic is eating away at the core of the nation’s economic health and is creating an historic level of REO properties on the market.
This trend has contributed to a decrease in housing prices and created a whole new level of affordability for buyers. Our goal is to generate awareness of REOs as affordable housing options for today’s homebuyers and help them turn those unfortunate losses into new beginnings.
If you are a First-time buyers that wants to get the most value for their first investment, you may want to consider an REO as an option.
The benefits of buying an REO are:
- REOs are typically priced aggressive to sell within 90 days of listing. Banks are eager to sell them and generally price them low to ensure a quick transaction.
- Because Banks are motivated to sell REOs quickly, they are usually willing to negotiate with buyers, so you often gain more bargaining.
- REOs will have clear title, current property taxes, and some, if not all repairs done by the lender prior to going on the market.
- Today’s low interest rates can help make an REO purchase more affordable than renting.
- Banks are willing to contribute up to 3 percent of Buyer’s closing costs.
The benefit of buying an REO over Short Sales is they are priced already, there is access, and you can write your offer and go. If you decide that buying an REO is for you, read some of our tips for making your purchase a successful one.
- The bank selling the property may want you to be cross qualified with their own lender, though you can always use another lender in the end.
- Be prepared to offer your Highest and Best right up front to increase your chances of a being the successful bid that gets the Counter. The cleaner and more qualified your offer is, the better your chances become.
- Most REOs are sold As Is, so buyers should make your offer to buy an REO contingent upon a home inspection. It’s important to find an inspector who is a licensed contractor, so they can estimate any resulting repair costs.
- Be aware that writing an offer to with too many contingencies will likely derail your bid.
- Buyers must be prepared to lose out to any Buyers with ALL CASH. In the REO world, cash is still king because there is no appraisal, last-minute lender required repairs or other potential problems to kill the deal.
Fannie Mae does give prospective homebuyers looking to buy an REO an advantage. Last month, it introduced a program that shuts out Investor Buyers for the first 15 days a home is on the market. Fannie Mae also has a financing program, which allows buyers to put down as little as 3% without the mortgage insurance requirement. It also provides loans that allow borrowers to wrap in costs for home renovations.
Wells Fargo also now provides homebuyers buying an REO with a head start over the Cash Investors that have been consuming the market. Freddie Mac is testing a program that also initially shuts out investor buyers from dominating the affordable homebuying opportunities.
