4 Tips if you’re Considering an REO Property

Real-estate owned (REO) properties – also known as bank-owned – can be a great investment for first time home buyers. This particular type of home is one that didn’t sell at auction, and ownership was then transferred to the bank or lender. REOs can be a great option for many reasons: first, in many cases, lenders are motivated because they want the property off their books, and secondly (depending on the bank’s history with the property) these homes may be priced at a discount.

There are other factors to consider, though, as you determine whether buying a bank-owned home is right for you. The four tips below will help guide you through the process and make buying an REO a more manageable process.

  • Begin with Financing
    REO property or not, the first thing you want to do is secure financing for your property. When you find a lender you like, talk to them about distressed properties and ask which is the best financing option for you. This is particularly important because of the timing of the REO home buying process. As we mentioned above, lenders are motivated to sell and want to get this home off of their books, so the more prepared you are with financing, the better.
  • Find an Agent Who Knows REO Homes
    If you’re considering an REO property, you’ll want to have an experienced agent who will help you navigate the home buying process. Your agent helps make sure you are finding the best properties at the best possible prices, and they will use their experience to guide you through every stage of the process. Your agent should also be able to tell you if you need to hire anyone else, such as an attorney or an inspection service, depending on your state and situation.
  • Refine Your List of Lender-Owned Properties

Just like any home, you’ll want to determine your “must-haves” and “nice to haves” for your property.

  • Have the Property Inspected

An inspection should be part of buying any home, but it is crucial for bank-owned homes. Real estate owned properties are typically sold “as is,” meaning the homebuyer is on the hook for any repairs—including major structural issues—that need to be fixed.

If you’re prepared to be patient and thorough, buying a bank-owned property could be a perfect option for you. If you’re interested in checking out REO properties in the Denver area, give Metrowest a shout. We specialize in distressed property sales and would love to help you navigate the waters!

 

Ken Blevins

About Ken Blevins

Ken Blevins, CEO of Metrowest Real Estate Services, is a veteran in mortgage and default servicing with more than 24 years of experience in collections, foreclosure/bankruptcy, loss mitigation and real estate disposition (REO). Blevins was an original co-founder of Metrowest in 2003, a Real Estate Brokerage and Services Company focused on the resale, recovery and liquidation of distressed real estate in Denver, Colorado and surrounding metros. Blevins assumed the role of CEO in January 2014 and provides strategic direction and has management accountability for the day-to-day operations. Under his direction, Blevins drives all default management operations to maximize asset value recovery and reduce loss severity through a strategy focused on customer service and state of the art technology. Blevins has 18 years of direct operational experience in all facets of REO Asset Management having managed large national REO Disposition contracts for Fannie Mae, Freddie Mac, Wells Fargo, JP Morgan Chase, CitiFinancial, GMAC Mortgage and other various financial institutions. Blevins specialties include REO asset management, real estate investment, bulk REO acquisitions and distressed asset recovery and liquidation, and he has directed the resolution and liquidation of over ten billion in institutionally-owned residential real estate.

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