For several reasons, REO properties can be a great value for both investors and first time home buyers alike. But what exactly is an REO property and why should you consider this type of house? REO stands for Real Estate Owned, and these types of homes have been repossessed by banks after the owners were unable to comply with mortgage obligations. Buying these types of properties is a different process than traditional homes, but with an experienced pro on your side, you can use that to your advantage. Read on to learn why expanding your search to include REO homes could be a very good thing.
- No baggage
REO homes are free and clear of any past liens or other discrepancies. The bank responsible for the repossession will immediately extinguish any liens against the property and make sure that taxes are brought current. It’s a safe bet that REO homes are free of government and municipal liens, HOA liens, tax burdens and anything else that could impede an impending transaction. Those buying REO properties will usually be able to do so with a clear conscious, and an even clearer title. - You can still negotiate
Banks are motivated sellers as they want to rid themselves of the homes they repossess. Home buyers and investors ready to take advantage of the opportunities they offer will be rewarded accordingly. Since banks want to get REO properties off their books, buyers can actually leverage the bank’s urgency to their own advantage. - Possible concessions for buyers
While many REO properties are marketed “as is”, it’s safe to assume there will be little room to negotiate a cheaper price when buying REO properties. Still, it doesn’t mean you can’t get the bank to make a few concessions of their own. Remember, the bank is in no hurry to hold on to the properties they repossess. And while they certainly won’t give them away, they may be willing to meet somewhere in the middle on more than a few things.
Ready to start checking out REO homes in the Denver area? There are some great deals to be had Contact Metrowest today – one of our experienced pros would love to help you start the process.