Foreclosed Homes

Posted on July 10th, 2008 by saman

There are many smart home buyers who believe that they can make a lot of money by purchasing REO foreclosed homes. Many of these homes are sold as a bargain. When a REO foreclosure home is priced at a discount there are usually a number of offers for the home. This means that there is a lot of competition for the home.

Some REO homes get about twenty offers. The bank may throw out most of the offers and settle on two. After that the buyers that are selected will be required to resubmit their final and highest offer. There are times where the bank accepts the best offer up front. There a few things you can do to be sure you come out on top when purchasing a REO foreclosed home.

First be sure to ask the purchase price on the sheriff’s or trustee’s deed. This is usually on the document that you can get from the company that holds the title or from the tax documentation. You should compare the price you found with what the bank is asking for the home. You should also look at the number of loans that are on the home. The amount the home is selling for should be between the sale price and the amount of the first mortgage.

You should also look at the past three months of sales in the neighborhood and compare them to the home you want to buy. This way you can determine what the REO foreclosure is really worth. It is important to only use the homes that are similar to the foreclosure home you are thinking of buying.

If you can, find out the pending sales in the neighborhood and find out what some homes are selling for. However some realtors will not share these details with you while others may. You should take a look at some listings that are active. These listings are the ones that other potential homeowners will use to determine what they will bid on a home.

Most agents that are selling REO foreclosure homes are working with a few banks. Some realtors only work with REO foreclosure homes and do not sell any other kind of home. Most realtors sell a number of REO foreclosures.

You should be sure to ask how many offers have been made on a REO foreclosure home. If no offers have been made on the home, you can most likely offer beneath the list price and have your offer accepted by the bank. But if there are two offers or more on the foreclosure home, you will probably need to offer the bank above what they are asking for it.

If there are over ten offers, realize that these offers may be cash offers. Banks are highly in favor of cash offers. If you get financing to buy the home, you might have to raise your offer in order for the bank to consider it.

Finally do not ask the bank to inspect the home or repair it. There are times when the bank will pay for any needed repairs on the foreclosure home but will not usually agree to do this when you are just putting an offer on the home. After the home is inspected, renegotiate your offer after the bank accepts it.