As long as there are defaulting borrowers, there will be REO foreclosures waiting for people to take them away from a bank’s hand. These homes are non-performing bank assets and banks are really keen on unloading them to buyers. These homes are compiled in a list given to brokers or listed in online foreclosure listings services.
REO foreclosures provide opportunities for every American family or individual to own property. These properties are also ideal for property investors looking for lower priced homes to refurbish and resell. There are some qualities that are unique to bank owned homes so it is always prudent to get to know more about this type of foreclosure before purchasing them.
Elements of REO Foreclosures
REO foreclosures are properties that have become bank property by virtue of a failed auction. The formers of these homes have been foreclosed on after failing to meet mortgage obligations, typically for three consecutive months. Once the foreclosure has been made final, the property is then offered to the open market through an auction. If a bidder wins a home auction they pay for the entire amount of their winning bid either instantly or over a short period of time.
This is probably the reason why properties offered in a auction sometimes revert to banks and become REO bank foreclosures where they can be purchased through a financing plan that are sometimes even offered by the same bank selling the property. Among the many advantages of purchasing REO foreclosures is the significantly discounted price since banks primarily want to recover the unpaid portion of the mortgage and probably some additional costs in maintaining the property. Some banks, especially those with a high inventory of REO homes take pains in ensuring that the homes are attractive enough to increase their sale potential. Banks would normally throw in a basic pest certification and a title insurance to the price package. They will also take charge of the eviction process. Individuals and investors alike can appreciate these perks that they can only enjoy with bank owned homes.
Archive for ◊ November, 2010 ◊
House Foreclosures have hit an all time high with the mortgage crisis in the country. The financial system has squeezed badly resulting in cautious approach by most credit companies and sell offs followed by the NPA’s. The money market is experiencing immense pressure and the real estate is tumbling along the mortgage sub prime crisis.
Foreclosures are a result of the default made by the borrower in a loan when the borrower after repeated reminders from the lender is not able to pay off the monthly installments. This leaves the lender with no other option than to foreclose the loan and start with the auction for recovering the loan amount. The recovery is done by auction sale which requires participants bidding on the property and the base price is determines as the outstanding loan amount on the property. The highest bidder in an auction is termed as the fresh buyer and he is required to pay 10% of the price on the auction day and remaining in 30 day from the date of sale. The fresh buyers can also go in for a loan for the same.
Benefits to Buyers of House Foreclosures
Most first time buyers and investors of real estate are interested in purchasing the house foreclosures as the price demanded in the sale is much lower than the actual price of the property. The lender is interested in recovering their debt which makes the price so attractive. Other benefits which the buyers can get are the makeover properties for sale which have been recently renovated or repaired and would not require any cosmetic improvement before moving in. This saves much cost for the buyer. The buyer of a Foreclosed property shall receive the complete documentation from the bank which is a certified authority and the buyer can be sure of the legal documentation.
Tips for Buyers
Buyers are most excited when it comes to House foreclosures for sale as they get huge benefits while purchasing their dream home. The buyers should take care of some essential facts which shall help them in availing best value for money. The buyer of a foreclosed property should confirm the market rate of the property and check out for the condition of the property. The buyer should also check with local government authorities whether the property has some other lien or liability which may shall pose as a burden after the purchase. After checking of the above points the buyer should appoint a local representative who is a certified professional and can check all the legal papers of the property. This shall help in proceeding with the purchase smoothly.
Online Availability for House Foreclosures
Most House Foreclosures are listed online and by searching on the web best property options can be made available. The price of the property can also be checked on the web and compared to similar investment options to choose the best.