Reo Foreclosures Making Preparations To Invest

Making Preparations to Invest in REO Foreclosures

REO foreclosures being the under-priced properties are attractive enough to bind the interest of potential investors. If you are thinking of single REO or bulk REO investing, you might face stiff competition for the bank owned REOs. An REO foreclosure at a good location receives more than few offers from the investors. So, you must be prepared to make an irresistible offer for the REO foreclosures. Here are some preparations that first-time REO investors must do to make their offer the most acceptable one.

Study the Past REO Foreclosure Sales

Before you make an offer, it is a good idea to study the sales of past REO foreclosures in the same area. This will help you determine what should be the worth of the REO foreclosure you are eying at. You must look at the REO properties sold in at least past three months and match the current REO in terms of number of bedrooms, space, amenities and the overall condition of the property.

Learn about the Offers Received

If you are working with a bulk REO trader or broker, you must try to learn about the offers received for the REO foreclosure. As obvious, you should make your offer better than the other offers by offering more cost. However, if no offer has been received, you can be fortunate to offer low purchasing cost.

Inspect the Property

REO foreclosures offer the advantage of inspection. If you have selected an REO foreclosure in a particular area, you must hire the property inspection experts to get the propertys condition evaluated. You can proceed in two ways if some repair work is required. First, you can ask the bank to get the repair work done. Second, if the bank doesnt agree to the first, you can further lower the price in your offer.

Prepare Your Finance

Banks are more than eager to get rid of the REO foreclosures from their books. So, among all the offers a bank receives for a particular REO property, those offering cash are considered the most. However, a pre-approved mortgage too is preferred by the banks.

If you are borrowing a loan or mortgage to purchase the REO foreclosure, here is a list of documents that the bank would expect from you:

Pre-approval Letter: A pre-approval letter from the lender from whom you are borrowing the loan. Remember that a pre-approval letter is different from a pre-qual letter.

Credit Score Proof: The bank selling REO foreclosure is very much interested in learning about your capability to repay the mortgage. So, you need to provide the proof of your credit score.

Fund Verification: The bank selling REO foreclosures would like to verify the source of your down payment. This ensures that you actually have the down payment deposited at one or the other source.

Besides, you would be required to make the good faith deposit, a percent deposit of the total purchase price.

By keeping all the above-mentioned things at place, you can enhance your chances of investing in the tempting REO foreclosures available with a broker in your area.

by: Mistie

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