REO Home Buying Perks
An REO (real estate owned) property is one that’s offered for sale by a bank or mortgage lender, and while it differs a bit from a traditional sale, may bring excellent benefits to a buyer.
A lender acquires an REO through foreclosure from a borrower in default, and these types of homes are often listed below market value. In addition to a lower asking price, there are other benefits to purchasing this type of home – read on to learn more.
Banks and mortgage lenders acquire REOs after a mortgage loan defaults, and they really aren’t interested in keeping these costly assets. Lender-owners want to sell these properties as quickly as possible, which typically results in excellent buyer concessions.
Favorable Mortgage Rates:
Lenders earn nothing on an REO. Therefore, they have less risk in making a new mortgage loan on the property. Since lenders are anxious to remove the non-performing REO loan from the books as quickly as possible, buyers can often negotiate a better interest rate.
REOs can be listed up to 20 to 30 percent below market value. The lower purchase price usually translates into a lower total mortgage debt, so over the life of the loan, buyers can save thousands.
Metrowest specializes in REO transactions. If you think this could be the right type of purchase for you, give us a call. We’d love to help you