REO (bank-owned) properties can be a great opportunity for first time buyers and investors as well. You often hear how important the inspection process is for these types of homes because they are typically sold as-is.
Depending on the condition of the home, you may have to only make a few cosmetic repairs/replacements. Other REO homes may require extensive repair. To make sure you know what you’re getting into, here we’ll give you a run-down of the inspection process for REO properties.
Once you get a REO under contract, you typically have the right to do an inspection. Usually the bank gives a buyer 10 days or less to complete the inspection on a foreclosure.
If you find serious issues through the inspection process, the bank may or may not fix the issues. Each bank is different in how they handle inspection requests – some banks will make minor repairs on items that might delay financing like a plumbing leak. Other banks won’t do any repairs, and others may make other repairs that are only required for financing. Unfortunately, there are no guarantees to this part of the process, because each situation is looked at on a case by case basis. A good rule to follow is to not anticipate any repairs – that way you set yourself up for happy news if the bank decides to address some of the things found during inspection.
Typically, inspections cost between $300 – $400. Instead of looking at is as an additional cost, keep in mind it’s really a great way to make sure you’re not buying more house (and repairs) than you can handle. If the bank isn’t willing to make repairs and you decide you’re not up for the significant repairs a house may need, you’ll be able to walk away.
Ready to start checking out REO properties in the Denver metro area? Give Metrowest a call – we specialize in REO sales and we’d love to help you start the process.