Are you in the marketing for a good deal on a home? Well, if you’re like any other house hunter in the United States, the answer should be a big, fat, resounding yes! Come on, even if you’re a gazillionaire, why spend more money than you have to or should? Even real estate mogul Donald Trump never spends more than he has or wants to on the multimillion dollar properties he buys. Similarly, even average, regular, Joe Schmoes like you can save more than a pretty penny or two on their dream home by buying REO properties.
REO properties, also commonly referred to as real estate owned properties or bank owned properties, are an excellent way to get a great deal on a home or property you enjoy. REO properties Chicago can be residential properties, Chicago commercial real estate, and any other kind of REO property anywhere else in the United States. Although residential homes are common examples, a bank can take over and own any kind of property in foreclosure.
But before you dive in head first into the world of REO properties, it’s important to know more about them and truly understand what they are. It’s best to start at the beginning and cut through some of the more complex elements of these bank owned properties such as tenant representation and whatnot.
Imagine a homeowner who fell on hard times and can’t afford to pay their monthly mortgage. These homeowners who have defaulted still have a chance to get caught up and stay in their homes during the pre-foreclosure stage, but if they can’t pau up, the home goes to auction. During this phase, the bank forecloses the property and its auctioned off to the highest bidder. However in the event the home doesn’t sell for some reason, it officially becomes bank-owned property, otherwise known as REO properties.
Now that all that’s out of the way and you understand exactly what a real estate owned property is, you can down to the business of buying one. Purchasing an REO property has a lot of benefits that extend beyond getting a good deal. Not sure what they? No worries! Check out this list!
Straight from the horses mouth: No homeowners to deal with
Perhaps one of the greatest benefits of buying a banked owned or REO property is that you get to deal directly with the bank. Many potential home buyers prefer to cut out the middle man — in this case the homeowners — and deal directly with the bank instead. Often times REO properties are completely empty and vacant, meaning potential home buyers won’t have to feel awkward or guilty dealing with tenants that are reluctant to leave. In some cases, troubled homeowners may even resort to or threaten taking legal action so dealing with the bank is always an easier choice.
No outstanding taxes whatsoever
If the previous homeowners suddenly stopped paying their property taxes, it can complicate the entire home buying process. But if you’re buying an REO property, this isn’t a problem! In fact, banks often waive any and all outstanding real estate property takes that are due on a property in order to entice potential buyers. However it never hurts to be on the safe side and do a title search.
Option for a home inspection? Take it!
When purchasing a bank owned or REO property, you have the right to request to see and even inspect bank owned properties before you seal the deal and sign your name on the dotted line in order to purchase it. This is an important step to take and you should always do it! Typically speaking, REOs are often distressed and in most cases, the former owners probably didn’t do much to keep it the place up or ready to move in. As such, inspections are vital in order to determine the work that needs to be done in order to get it move in ready!
Discounted prices: The Price is right
Perhaps the most common reason why people first become interested in buying REO properties is because their prices are typically well below their market value price. However keep in mind that doesn’t mean you are always getting the best price.