subject: Foreclosures and Buying REO Properties [print this page] Foreclosures and Buying REO Properties Foreclosures and Buying REO Properties
Recent reports show that in the current economic downturn, foreclosure action is on the rise in the United States. California, Nevada, Florida and Arizona have the highest levels of foreclosures in the country, and foreclosures are now on the increase in Seattle, Houston, Detroit, Atlanta and Chicago as well. Today, it's not just people who have recently taken out mortgages that they can only marginally afford who are getting hit by foreclosure action. It's also people with safe, 30-year mortgages who are being affected - people who have lost their jobs, and, unable to find new ones, can't keep up with their monthly repayments.Given that foreclosures have continued to rise since the housing market bust in 2006, more real estate-owned (REO) properties are becoming available. According to some estimates, 1 in 200 homes in the United States go through the foreclosure process and are assumed by banks. REO properties present a great opportunity for buyers because they are often available below market value at significant discounts, as a result of having already gone to auction and received no winning bidders. And with the current foreclosure action in the United States, a wide variety of properties are available for buyers to choose from.If you're interested in buying REO properties, there are a few ways to find out about properties for sale. If you're thinking about buying a foreclosure home at auction, check your local newspaper, which will publish the details and date of the auction. There are several sources for finding REO properties that have been passed up at auction. Banks have information about REO properties, so visit their website or drop into a branch for a list of available homes. Real estate agents, of course, also have information about REO properties, and they can do a search based on your requirements. If you're interested in purchasing a HUD (Department of Housing and Urban Development) property, you'll need to contact the Department for information about properties.Like with any home, you'll need to arrange an inspection of the REO property. Most homes are sold "as is," so you'll want to get an idea of the condition of the home, how much work it needs, and the estimated value of repairs. Buying REO properties can sometimes be a lengthier process than if you were buying a regular property, so get your offer in as soon as you can, as it can take weeks for banks to review your response. Buyers should be prepared to negotiate: the bank is likely to get several offers, so you'll probably need to improve on your original offer. It can also pay to have cash when it comes to purchasing REO properties - if you can pay upfront for most of the property, banks may be more likely to lower the price or speed up the process.
