Knowing when a property is actually real estate owned, and when it is merely a foreclosure is paramount to finding the best deals on property. Prior to the bank buying the property, the buyer will default on their mortgage and the property will be placed on sale to the public via auction. This property is now a foreclosed property and will be sold at a discounted price to the public.
If the home does not sell for the price that the bank wants, the lender will then buy back the property in order to avoid selling it for less than the market value. At this point, the property becomes REO property and can offer significant savings to you as a buyer.
Banks are not in the business of owning property, they are in the business of making money. Once a property becomes REO property, the bank will begin the process of listing the property for sale. A typical real estate owned home can sell for almost 20% off market value.
Because the lender wants to get rid of the property as soon as possible, they are far more willing to work with potential buyers. Generally, any taxes or debts due will be mended by the lender and they will also evict any current tenants to make the buying process easier for buyers.
First time buyers are ideal candidates for REO property purchases. They are able to obtain their first home at a significant savings and with none of the difficulties typical of traditional real estate transactions.
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Crowley & Cummings are real estate attorneys located in Dedham MA specializing in real estate closings, title examinations, complex title issues, purchase & sale agreements, condo conversions, and other related services. They service lenders and mortgage brokers, real estate agents, as well as buyers and sellers in Massachusetts, New England, and throughout the US. To learn more visit them online at www.CrowleyCummings.com.
Wednesday, February 2, 2011
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