While real estate owned (REO) or bank owned properties can be a great deal and good way to break into homeownership, there are mistakes to avoid to make the process as seamless as possible.If you’re considering purchasing an REO property, make sure to avoid the mistakes below.
Mistake 1 – All foreclosed homes are bargains
Banks aren’t in the business of owning homes. They want to get foreclosed properties out of their inventory, so a homes’ condition isn’t their concern. Be prepared to do your homework to make sure a the REO property you want is something you can afford, and also afford to repair.
Mistake 2 – No inspection necessary
Always, always, always get a home inspection. A professional inspector will be able to tell you the current condition of the home, what repairs will need to be made, and any other crucial factors about the state of the property. Inspections cost between $300 – $500, which is a small price to pay to avoid expensive repairs down the road.
Mistake 3 – Not enough cash
Be prepared to pay for closing costs and fees or any repairs and unforeseen expenses, especially if you’re buying an “as is” property with FHA financing that may require buyer-paid repairs to pass FHA inspection. Remember a foreclosed home may not be a bargain if you can’t afford to make it livable.
Mistake 4 – Not enough patience
If you want to buy smart in the foreclosed-home market, you need to do your research. If possible, learn about other higher or lower bids, property taxes, utility bills, liens, and so on. Take time for due diligence.
If you’re ready to check out REO properties in the Denver area, contact Metrowest today – we specialize in this type of sale and would love to help you start the process!