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.