subject: The Finer Points of Purchasing REO Homes [print this page] The Finer Points of Purchasing REO Homes The Finer Points of Purchasing REO Homes
Homebuyers and investors who are considering purchasing REO homes should be aware of the less obvious aspects of negotiations. There are certain information that buyers can acquire that will help them gain a better foothold come price negotiation time.
What the Property History Can Tell
Before making an offer for a bank owned property, it would be better to find out how much the bank spent to acquire the property before they offered it for sale. Such information can be found on Trustee's deeds and other documents that offer details about the property.
Buyers should seek the help of a real estate agent if they are not familiar on how to search for such information since agents would likely know where to look. Compare the amount that the bank has spent to acquire the property with the selling price. More often than not, a price offer somewhere between the two prices would be an ideal one.
Dealing with Competition
A property being sold by a bank might have multiple offers. If a buyer is faced with competitors, he might have to up his offer price if he is really interested in getting the property. If a buyer is the only one interested in the REO homes, then he can bid below the list price. Most banks prefer to sell off properties at the shortest time possible since they do not want to be burdened by maintaining them.
Those who offer cash payment are also more likely to get accepted since majority of banks prefer cash. If a buyer is competing against offers in cash, he might have to raise his offer price significantly just to get the property. If not a lot of competitors are offering for the home, try looking for past deals that the bank has closed and examine the average price that the bank accepts for a similar property.
Purchasing REO homes can bring a lot of benefits if the buyer knows how to negotiate and how to find information that will help him secure the best possible purchase price. Buyers should always spend significant time on researching the property and the bank selling it before making an offer.
