If you are looking to dabble in real estate and get a good deal in your transaction, you may want to consider purchasing an REO property. These properties are owned by the bank and will often come with a lower price tag than other available properties in their vicinity.
While the idea of buying a bank-owned property may sound flawless on paper, there are a few things you need to consider before making your final decision. The best way to go about this is to create a checklist. This blog post will discuss the checklist that will better your chances of successfully purchasing a bank-owned REO.
Buying a Bank-Owned REO: Checklist for a Successful Purchase
It is crucial to take a closer look at the property before making an offer. Although you may get a reasonable price on an REO property, it is essential to remember that REO stands for “real estate owned” by the bank. This means that the bank had to foreclose on the property for one reason or another, the most common reason being that the previous owner could not afford to keep up with their mortgage payments. Now that the basics are out of the way, here is a helpful checklist that you need to follow if you want to make the most out of your REO purchase.
1 – Inspect the Property
The first thing you need to do is inspect the property for possible damage. Keep in mind that the previous owner may not have been able to afford the upkeep of the home before it was foreclosed. Getting a home inspection will find any potential problems that may worsen when you live on the property.
2 – Do a Title Search
Next, you will want to do a title search on the property to see if there are any unpaid taxes, and if so, how much they are. If you decide to buy the property, later on, it may fall to you to pay any existing fees and penalties on the home’s real estate taxes.
3 – Be Ready to Negotiate
To ensure that you get the best possible deal, you need to be open to negotiating. Banks may not be ready to give up the property away at a bargain price. Haggling is your best bet to ensure that you get your money’s worth. Your real estate broker may be able to help you with this.
4 – Present Photos and Do Your Research
When you inspect the home, make sure that you take photos of any existing damage to show as proof later on when you haggle. These photos will serve as evidence and help you make your case when you ask for a more agreeable price.
5 – Look for Good Financing Options
Once you can reach an agreement, it is best to shop around different lenders to find the best financing option for your REO purchase.
Conclusion
If you think you are ready to start looking for possible REO opportunities to invest in, brace yourself! It may take time and multiple offers before you can land one successfully. However, following the checklist and working with an experienced real estate professional will help you get the best deal when you finally find the REO property you want to buy.
Should you need assistance in buying bank-owned properties in Florida or other types of real estate, you can count on Orlando REO Professionals! We are experts in providing top-notch investment property advice and wealth management. Interested parties may call 407-704-6924.