Pitfalls to Avoid when Buying an REO Property

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!

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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