As a buyer of distressed properties there are three options of purchase available to you.
3. REO – Real Estate Owned by the bank.
1. Pre-foreclosure property purchase is the stage when the lender started the foreclosure process. At this point the owner has the option to pay the outstanding loan balance or negotiate a short sale. In the short sale, the sale amount can be less than the outstanding loan balance and approval by the lender is required in order to pursue forward. The process can take a longer period of time, but it worth the time and the effort for both: the buyer who gets a property at a significantly lower price, and the seller who avoids foreclosure and has less consequences that affect the credit history.
2.Auctions are properties sold at a foreclosure auction to the highest bidder. Buying these properties can be a great deal but also a great risk. The buyer needs to do all the due diligence regarding the condition of the property, and in most cases it is impossible to inspect the property before the auction. In addition, the property might be occupied and the new owner will need to evict the occupant. Furthermore, the property might be subject to different liens that transfer with the property that the buyer might assume with the property.
REO or Real Estate Owned by a lender is the property that did not sell at the auction and the lender took possession of. These properties are usually listed with an REO Brokers and sold “as is” so the lender will not make any fix ups and repairs as well as there are no guarantees regarding the condition of the property. It is highly recommended to hire buyer’s agent to assist you with the purchase of REO property.
If you would like to get more information please contact me to get a free Foreclosure guide as well as a free list of foreclosures in your area.