The unfortunate circumstances of the recent economic conditions have caused many people to lose their homes because they simply could not afford to pay for them. These homes, taken back by banks and other lenders, go into foreclosure. If they aren't sold during a foreclosure auction
, they become what is known as Real Estate Owned (REO) homes. These homes are usually priced lower than the original loan amount, because they exclude expenses such as attorney fees and interest. Also, lenders generally remove all second and third liens on the property, delinquent taxes, HOA fees, mechanics' liens, etc. Since banks and other lenders are not in the business of maintaining homes, they are eager to sell REO homes and are more willing to negotiate on the price.
A concern that some people have about buying REO
homes for sale is that they may have been neglected and in need of repair. However, informed home buyers know that when they buy REO properties
, the savings often far outweigh any cost of repairs. Also, many home buyers are able to qualify for an affordable FHA financing that includes the cost of the home and the cost of repairs?all in one loan. Plus, just like other home purchases, REO home buyers are entitled to hire an inspector to find out exactly what's wrong with the property and what needs to fixed before purchasing an REO home.
With an REO home, you can stop paying rent, lower your current monthly mortgage payments, upgrade your lifestyle, or invest in your future. And with new online REO auction websites, it's easy for anyone to find and buy an REO home. Hubzu.com, for example, shows buyers how to buy REO properties and gives them detailed information, photos, and documentation on REO property for sale to help them make informed decisions. A unique benefit to purchasing a home at auction on Hubzu.com is that buyers can see what other people are bidding for a property and what the highest bid is. That way, they know what the competition is and can feel confident that they're getting a fair market price.
Whether you're a first-time home buyer, a recent college graduate, a novice investor, or all of the above, REO homes are great for anyone in the market for a new home. There's a reason why investors and property managers have put their money into REO homes for years: you can get some fantastic deals from the REO home sellers when you buy REO.