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Elizabeth Weintraub

Tips for Buying an REO Home From the Bank

By May 26, 2008

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Where I sell in Sacramento, REOs (bank-owned homes) are receiving multiple offers, sometimes 20 to 30 offers on any given listing. My buyers win most of the time because they follow my REO tips and suggestions.

Banks that have taken back property in foreclosure have wised up. Rarely will you see a home priced right at market value. Much of the time, the REOs are underpriced, sometimes by many thousands of dollars. Banks do this to create a bidding war among buyers. And it's working.

First-time home buyers are competing with investors and often against investors who can afford to pay all cash. If a buyer pays cash, there is no appraisal, no loan contingency, and very little else that could prevent the transaction from closing. So, where does that leave home buyers who need to get a loan? Generally, at the bottom of the rejected pile. But there are ways to spice up your offer and make it more attractive, without overpaying for the home . . . read more about REO tips.

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At the time of writing, Elizabeth Weintraub, DRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.

Comments

August 15, 2008 at 8:03 am
(1) kenny says:

My credit score just dropped,how can i buy a foreclosured home with my score down in the 600 now? this have never happen before?

August 15, 2008 at 10:03 am
(2) homebuying says:

Some REOs make borrowers submit mid FICOS now with a purchase offer. So, for those, you’re probably out of luck. But not every REO has this practice — and FHA has risk-based pricing, so, you might be able to qualify for an FHA loan.

September 10, 2009 at 6:15 pm
(3) JAMES GOSSETTE says:

Same As you Guys, I sell Pasco REO properties. REO properties are being in demand today because of its affordability that’s why many people considered acquiring one.

February 9, 2010 at 11:22 am
(4) Frank Co says:

Some Investors did great in the past with REOs in Sacramento.
Palm Beach County has some great deals on REOs now.

October 25, 2010 at 3:18 pm
(5) Xtreme says:

We do the same thing in Maryland. One thing that most people don’t realize is that investors by the REO’s, then resell it at a value that is generally still less than market value. It’s important though that nothing is hidden, and everything be clear. We show how it’s done .

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