What you need to know
Foreclosure: the process of taking back a home through sheriff’s auction. Every county holds a sheriff’s auction once a month, and if you go to your county sheriff’s website, you can see the list of properties to be auctioned. It is not possible to view the properties beforehand, so you are purchasing sight unseen.
REO: Real Estate Owned. REO refers to homes owned by banks or government agencies.
How do you know if it’s a Bank Owned Home?
Bank owned properties are listed just like any other home. You can identify them one of two ways – through thelanguage in the description and in the pictures. The language in the in description will often include “Property being sold in as-is condition, buyer responsible for repairs, etc.” In the pictures, the house will be vacant, sometimes damage will be visible, and you may see signs that it’s been winterized, such as tape across the sinks or stickers over a plastic wrapped toilet.
It is common to find bank-owned homes in need of repairs. They are usually sold in “as-is” condition, meaning that the bank will make NO repairs.
Many REOs also have the utilities turned off, and they may or may not be able to be turned on for an inspection. Ask your Realtor if there is a property condition report available, it may help you get an idea of what is wrong with the house. If one is not available and utilities can’t be turned on, what you see is what you get.
Does financing change?
Depending on the condition of the property, it may or may not be eligible for “regular” financing. FHA loans are hard to get on REO listings, because they have stricter requirements about the condition of the property (and remember, the bank is not going to do any repairs).
Purchasing a bank owned home can take a lot longer than purchasing a seller owned home. There is a lot of paperwork and extra hoops to jump through, which can be stressful. Bank owned properties are not for everyone, but if you’re ready for the process they can be excellent investments!
Our team of experts are here to help! Contact us today at RE/MAX Legacy by calling 765-778-3573.