If you’re considering purchasing an REO (bank-owned) property, you’re probably aware of the uncertainty of the condition of the property and how important it is to have an inspection. But how does that exactly work? While REO properties can be a bargain, banks still want to get the most money they can for these homes, so you can’t necessarily count on them to make repairs.
Here we’ll check out some of the most frequently asked questions about REO properties that may help you determine if this type of purchase is right for you!
What is the inspection process like with an REO?
Once your REO property is under contract, you’ll want to hire a professional to do a complete inspection. Typically the bank gives buyers 10 days or less to complete this. If you find problems during the inspection, the bank may or may not fix the issues. Each bank is different in how they handle inspection requests – sometimes the 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 really is no way to know what the bank will do because each situation is looked at on a case by case basis. It’s always a good idea not to count on any repairs being made, although you may get lucky with some sellers.
What does “as-is” mean in an REO property?
Most REOs are sold in as-is condition. That means the way the home sits as it is it is now, is how the bank will sell it. Remember, some banks will make repairs and some will not. But also keep in mind that just because the home is listed in as-is condition, does not mean no repairs will be made, but it might. There really is no way to know what the bank will do until you formally ask the bank to make repairs after an inspection or appraisal.
The process may sound a bit daunting, but if you hire a real estate pro that’s experienced with these types of sales, they can help navigate the way and get you the best value for your money.
Contact the team at Metrowest today – we specialize in foreclosed and distressed properties and we’d love to help.