If you’re in the market for a bank-owned property in the Denver area, you might find a killer deal. However, it’s important to understand the buying process so you know what you’re in for and prepare for success. We’ve put together the following checklist ideal for those searching for the right REO (real estate owned) property – keep these things in mind to make the process as smooth and seamless as possible.
1) Find and agent and a lender
This is step one and should be done almost simultaneously. Priority one is to find a real estate agent who works directly with banks that own foreclosed homes and get a preapproval from a lender.
2) Get an agent on your side
Agents who specialize in REO sales/purchases have a long-term relationship with the banks who own the properties, and they know of listings that haven’t even come on the list yet. They’ll of course tell you about listings that you’re interested in, but they are likely also aware of listings that may be coming up because sometimes it may take a day or two (or even a week) before a listing actually comes onto the database.
3) Get preapproved or prequalified
Unless you’re planning to pay in cash, you’ll want a recent preapproval/prequalification letter from your lender. This describes how much money you can borrow, based upon the lender’s assessment of your credit score and income. Resist the urge to find a house first and financing later – REO deals move very quickly, so it’s important to have financing secure before you start looking.
4) Be realistic about price
Sure, you can get a great deal on an REO property, but the bank isn’t in the business of giving away houses. You have to keep up with comparable properties in the neighborhood. Just because a house may need a little work, the bank will still price it at a fair market value, in line with what other similar homes in the area are selling for.
Ready to start checking out REO homes in the metro area? Contact Metrowest – our experienced pros would love to help you start the process!