How To find and buy
Real estate owned properties
Buying a real estate owned (REO) home can be a great option for a first-time homebuyer as it can be cost effective and can potentially turn a profit in the long run after giving the property some TLC. One of the first crucial steps in purchasing a real estate owned property is doing your due diligence when assessing the property and its condition. Some will be in worse shape than you’ve ever seen a property and some will be easy to turn into livable condition.
Working with an experienced agent is also a very crucial step in the beginning of the process so that you don’t miss important steps to securing your purchase safely. Your agent will be able to walk you through all contingencies of the deal after the completion of the inspections and appraisals. Most banks will value the property at its market value, but the agent will help you bid competitively to win. It can be difficult to land a loan on a foreclosed property, but one trick to do so, is to get a loan from the bank who is currently holding the property.
Inspection is the next key step in the process. You want to have the property checked from top to bottom to prevent yourself from major issues later on. Checking for structural, electrical and plumbing issues will allow you to either ask for repairs or back out of the deal. Most cash buyers will have a contractor come in with them to appraise the house prior to putting in an offer, but most buyers looking to buy on a loan will wait to appraise till after submitting offer which could burn them, if the offer is accepted prior to finding the issues. You want to be prepared for any situation that may arise when buying a foreclosed property. There may be loads of work to be done that may cost lots of $$$ so you want to be prepared and have that money ready.
Where do I find a real estate owned property?
You can find real estate owned properties all over Connecticut, Massachusetts and Rhode Island. We sell real estate owned properties in all those states. We keep an extensive property list on all of our social media sites and you can find many of them on Zillow.com as well. Also, many of the banks that hold these assets have the properties posted on their sites as well such as Bank of America and Wells Fargo which we also work with. When you find the property you want, all the information for the listing broker will be present for you to take action.
How do I buy a real estate owned property?
One of the most popular ways to finance the purchase of a foreclosure now is a 203(k)-rehabilitation loan which is FHA backed. This allows for you to be able to finance repairs of the property into your mortgage all in one cost package, or they will assess property value after repairs and base your mortgage off that value, whatever is less. Only downside of a 203(k) loan is that your interest rate will be slightly higher. To be able to qualify for this loan there needs to be $5,000 minimum eligible home improvement projects on the property. And lastly, you can buy a foreclosure property with cash in some scenarios where the bank is willing to transact that way.
Call Us: 1(844)-HUD-7243