subject: What You Need To Know About Bank REO Houses [print this page] What You Need To Know About Bank REO Houses
When a borrower defaults on his loan and fails to make mortgage payments consecutively, the bank or lender is given by law the right to repossess his property. If the borrower is unable to at least make his obligation current, the bank will try to sell such property at an auction to recover its losses. However, those that fail to be sold revert to the bank's ownership and become what we now know as bank REO houses.
Understand Bank REO Houses Before You Buy
Understand that the main reason why these properties failed to sell successfully at an auction is because it is very likely that no bid satisfying the minimum amount required by the bank had been put forward. And this could be due to the fact that the amount owed to the bank is much higher than what the property could be worth. However, this is not to say that you cannot get any good bargain from among bank reo houses. When a property reverts to the bank's ownership, the bank technically erases all outstanding liens, judgments, unpaid taxes and other obligations attached to the property. This means that it is still highly possible that you can get very substantial leverage from purchasing these properties.
Another important thing to remember when dealing with REO properties is that you need to act quickly to ensure that you get what you want. Bank reo houses are much coveted in the industry and it is very likely that many other investors and buyers are interested in similar properties. It is very common for an REO property to get multiple offers from several individuals and if you are not quick enough, you may lose a very important opening.
It is also always advisable to conduct property inspections. Bank reo houses are sold as is which means that what you see is what you get. Since banks are more interested in recouping their losses, they would necessarily want to keep the cost of maintaining these properties at a minimum. Any repairs that need to be done will have to be shouldered by you. If you want to make sure that you get what your money is worth, do not forego any chance to visit the property.
