Purchasing a bank-owned or foreclosed property can mean significant savings. Use these tips to find discounted real estate-owned (REO) homes for sale.
The first step is thoroughly researching online to identify current real estate owned (REO) and foreclosure property listings in your desired locations. Numerous websites like RealtyTrac.com, HomePath.com, and Foreclosure.com compile up-to-date REO and foreclosure inventory from different banks and lenders into one searchable database.
Review listing details like property photos, square footage, number of bedrooms/bathrooms, amenities, age, school district, neighborhood, and the asking price. If interested in a property, drive by the address to visually inspect the exterior condition and street appeal. Sign up for listing alerts from aggregator sites to be notified immediately when a new property matching your criteria is listed.
This initial online research phase gives you valuable insider visibility into available REO properties and pricing trends in your city before speaking with real estate agents. You’ll gain knowledge of emerging deals and inventory.
Expand your research by regularly checking your local newspapers’ legal and foreclosure notices sections, both in print and online editions. These notices provide visibility into homes in the early stages of foreclosure – either going into initial default on their mortgage payments or being repossessed by the lender and scheduled for upcoming public foreclosure auctions.
Attending auctions requires having financing pre-approval in place but allows bidding on properties before ownership transfers to the bank. However, auction-based purchasing is recommended only for experienced investors, given the fast timeline and binding contracts. Monitoring notices nonetheless indicate properties that will soon transition into bank REOs.
Newspaper digging also uncovers distressed homes slated to become available that may still need to be listed on real estate sites. Spotting properties early in the foreclosure timeline gives you a jump start on the competition.
In addition to independent research, contact real estate agents in your area who specialize in buying and selling bank-owned REO properties. Experienced REO agents have established relationships with lending banks and access to exclusive REO listings before public listing, which they can alert clients to immediately.
When you’re seriously interested in a particular REO property, a knowledgeable agent can advise if any upcoming open houses are scheduled, guide you through the process of bidding at a foreclosure auction, negotiate assertively with the bank on your behalf to secure ideal pricing, and handle all the purchasing paperwork. Leveraging the inside expertise of the right agent gives you an advantage over DIY buyers.
Interview several REO-focused agents about their bank connections, success in purchasing REOs for buyers, and experience navigating the unique aspects of buying distressed properties. Vet agent reviews online as well. The right agent makes a huge difference.
Many significant lenders, like Wells Fargo, Chase, Bank of America, etc., have designated real estate-owned (REO) sections on their websites where they directly showcase properties they have repossessed and are selling. Browsing bank sites allows you to find these REOs before broader listing.
The banks provide property details, photos, neighborhood descriptions, and asking prices online for each REO. If interested, you can contact the bank’s REO sales department directly regarding viewing the property in person, submitting an offer, and handling purchasing procedures without the intermediary of an agent.
This is a more dedicated DIY process but eliminates agent commissions. Pricing also may be lower as banks are highly motivated to offload REO properties from their books quickly, often pricing them 10-20% below comparable fair market values in the area. Be ready to act fast as savvy buyers jump on appropriately priced REOs.
Buying a bank-owned REO or foreclosed home takes considerable research and preparation but offers vast savings off fair market housing costs. Conduct extensive online research on aggregator sites to uncover REO listings while monitoring local newspapers for early foreclosure notices. Experienced real estate agents provide invaluable insight into REOs becoming available. Remember to check bank websites directly as well for further inventory. Act quickly and decisively on desirable new listings and be ready to bid competitively. With diligence and speed, homebuyers willing to work can land excellent deals on bank-owned homes, potentially saving tens of thousands off purchasing comparable non-distressed properties. Just do your homework and be ready to act fast when the right deal emerges.