The report cites Laurie Goodman at Amherst Securities, who reports that 51% of mortgages also have a second one associated with them. There are bbout $1.053trn in second liens which are still unpaid to this day. Second mortgages make it difficult to achieve a short sale on most properties. Also, there have been reports that many lenders of second liens have been extorting money from sellers and their agents, in order to approve short sales. While bribes may make it easier to complete a short sale, it also remains illegal.

Jackson also determines that HAFA is basically the same as the Home Affordable Modification Program (HAMP), which has yet to see marginal successes. Since it is an extension of the same program, a homeowner must be qualified for HAMP to be eligible for HAFA and the terms still remain the same. Out of the 1 million homeowners who have applied for HAMP, only 168,000 have successfully joined the program. Jackson alleges some of these homeowners may have defaulted again. More often than not, for the other 800,000 or so people who have yet to be approved, the problem lies with incomplete requirements and paperwork. It seems that the homeowners themselves cannot submit the proper requirementts themselves, despite the amount of manpower the agency is dedicating to the program. JP Morgan says they try everything to get the homeowners to respond to their inquiries, averaging “36 calls, 15 letters, and 2 door-knocks” before they cancel an application.

Despite the best intentions of the program, Jackson says HAFA won’t “kick short sales into high gear.” Citing JP Morgan, it is likely that REO volumes will likely increase again this year, returning to 2008 levels. With inventory so high, it is expected that REO will make up a bulk of home sales, up until at least 2012, thus, as the author concludes, “recovery in housing is spelled R-E-O. Anything else is wasting time until we get there.”

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Allowing Habitat to have the “first look” could help stop the trend of the almost domino effect foreclosures have on a neighborhood. Stephen Seidel, senior director global programs for Habitat for Humanity International, recognizes that the organization will have a wider impact on communities, “The ability to purchase foreclosed houses before they hit the open market positions Habitat to make a bigger impact in communities hardest hit by the foreclosure crisis.”

Bank of America, Chase, Citi, Fannie Mae, Freddie Mac, GMAC, and Wells Fargo are just some of the lenders whose REO lists are being made available to NSP grantees. Says Seidel, “We are excited for the opportunity to help rebuild communities which have been negatively impacted by the foreclosure crisis, while assisting people in need of affordable housing.”

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Even though home values seemed to skyrocket over the last decade, the real estate mortgage crisis has caused a significant correction in prices, especially in markets like San Diego, Phoenix, Las Vegas, Los Angeles, and parts of Northern California. In certain parts of the country, like Detroit, it may take decades for real estate values to recover their value, and for those regions and cities. That’s not to say you can’t find a great deal in that market, just be prepared to find sellers that might be under water and are holding strong to an inflated price. The question you always have to ask yourself is this: will this property hold its original value and increase in value, or will I have a hard time recovering what I paid for it?

• Look at comparable sales in the area. How much have homes in the area sold for?
• Look up public records of recent sales and foreclosures.
• Get an appraisal from a certified professional.
• Talk to a broker if you have questions about a specific area.

Cities all over the country are full of homes and commercial properties that have simply been abandoned by owners who are unwilling or unable to maintain them. This is a phenomenon you’ll see in just about every city or town in America. All you have to do is drive around and you’ll see closed or abandoned properties. In some neighborhoods, so many people have walked away from homes that they could no longer afford that some blocks only have a single home occupied by the original owners. Everyone else has either moved away or been foreclosed upon. So, if you’re thinking of buying foreclosed homes as investment properties, give careful consideration to the neighborhood where you’re buying.

• Drive by the homes in the area, how well are those homes being kept?
• Look at public records: are there other homes that are in the process of being foreclosed on, or homeowners holding bank notes that are extremely high?
• Ask your potential neighbors what has been going on in the area for the past few years. This might be a good indicator of how the market will be in the future.

Take your time when purchasing a property. It can be easy to fall in love with a home because of its charm, and because it’s a great deal; but consider all your options first. Not doing so could potentially put you in the same position the previous homeowners were in. Consider all of the ramifications and pitfalls of any potential purchase.

• If you lost your job, how much money would you need to have on hand to make your housing payments for six months?
• Have you accounted for all maintenance, warranties, taxes, insurance, and dues for the home?
• How would you afford major expenses such as replacing the roof on your home, dealing with a flood, or burglary in your home?

No matter what situation you are in, it’s best to look at all angles when purchasing a home. Mostly importantly of which is to ensure you don’t purchase a home that is overpriced and has no hope of recovering in value.

What advice do you have for prospective homeowners on ensuring they don’t purchase a home that is overpriced?

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From the start, it’s clear that this next wave of foreclosures has implications on the way an investor finds the right property to buy.  First of all, markets that are already flooded with repossessed homes (California, Nevada, Arizona, and Florida are always at the top of that list) are likely areas where homes can be found for significantly lower prices than the norm.

Important to look at: location. A very large number of foreclosures in these markets tend to be on the outskirts of a metropolitan area because they looked especially affordable during the boom years.  While people will still choose to live at the edges of urban sprawl, their numbers are far lower than buyers who need to be close to a city for their work.  It’s important to look at the location of the home you intend to purchase for investment, and see if you’ll be able to 1) rent it out quickly and 2) sell it quickly if needed. By purchasing homes that are not within city limits, or are far from where most people work you run the risk of having a hard time reselling or renting when the time comes.

The often-hyped “fix and flip” method of making a profit may remain a viable option, but only in markets that can support the new price of the home when it’s put up for sale.  Despite the promises of all those infomercials that still run regularly, simply acquiring a property because it’s affordable and putting some money into it is hardly a guarantee of a profit.  Many investors learned this truth the hard way near the end of the Real Estate bubble, as their expensively remodeled properties spent month after month on the market, with many ending up as foreclosed homes.

In principle, flipping houses is still a good idea if there are buyers in that area because it provides benefits for the investor, the homebuyer, and the neighborhood all at once.  Traditionally, this tactic worked fairly well for investors who would carry a mortgage until the sale was completed, but that’s a rarity these days.  Cash buyers who then continue to use their own capital to make repairs and improvements stand the best chance of working such a deal to their advantage. First time homeowners looking to purchase a home, but that don’t have the capital to make vast improvements on a foreclosed home will likely be your buyers, so cater to them.

Finally, as with most endeavors, patience is a virtue in the pursuit of investment on foreclosure properties that will eventually turn a profit. Following research, market indicators, and the overall state of the economy is of course prudent, but even when all signs point to the potential for profit, it’s extremely wise to take a little extra time to think about all possible contingencies.  Having a plan for the property itself, along with a viable exit strategy goes a very long way towards mitigating the risk that comes naturally with any sizable investment.  Those elements tend to get pushed aside in the excitement of finding a seemingly undervalued piece of Real Estate, especially when there’s competition for the purchase.  Do not become complacent and assume that profit is a sure thing on any property.  Evaluate all factors, along with the risk involved and make a decision with the important points clearly in mind.

It’s worth noting that these strategies for a non-occupant real estate investor are also fully applicable to the regular homebuyer’s process, even if they plan on being an owner/occupant for a long time.  Essentially, any time a person buys a house constitutes an investment in the local Real Estate market and overall economy in the area, regardless of the motivation for the purchase.  Nobody would intentionally overpay for a home, or buy one that will likely go down in value, which means many homebuyers and investors will be competing for the best properties available.  Still, the cash buyer is a much more attractive customer these days, so they’re likely to be the winner in a bidding war:  Be that cash buyer and you stand the best chance of winning the property and coming out ahead.

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The People’s ARMy

Far from being a problem on the mend, the lending practices of the Real Estate bubble continue to bear down hardest on those who chose interest-only or Adjustable Rate Mortgages (ARMs) in order to afford more expensive property than they could otherwise.  During those boom years of massive home sales and new constructions, the prospect of monthly affordability of one’s own home made an already attractive notion seem all the more attainable.  Of course now everyone knows that wasn’t the whole story, and that thousands of extremely risky loans were made to people who couldn’t actually afford them, clearly guaranteeing widespread trouble in the future.  As the low interest rate periods of those loans expire, the borrower frequently finds their monthly mortgage payment skyrocket, even doubling or tripling the reasonable price a homeowner budgets for.  At such a juncture, few options exist for either the homeowner or lender, making a foreclosure filing nearly a foregone conclusion.

Stymied Stimulus

Despite the fact that the Obama administration’s $75 billion foreclosure prevention program was somewhat successful in helping fully applicable households, its scope was far too limited to help a large majority of troubled homeowners.  Circumstances like job losses, expiring mortgage modifications, and the seemingly commonsense tactic of strategic defaults have all kept the numbers of repossessed homes extremely high.  While it’s clear that the stimulus plan was a laudable effort aimed at keeping homeowners in their properties, it’s equally obvious that it had no chance of stopping the vast majority of foreclosures.  Even now, when the program has been around quite awhile and is well-known, only around 20% of people who signed up are actually through the process and getting what they need out of it.  Massive numbers of others haven’t completed the process or simply haven’t made payments.

So, while mortgage modification is theoretically available for almost anyone who qualifies, the fact of obscenely flooded real estate markets combined with further housing price drops in some areas have made a strategic foreclosure the absolute best option for many homeowners. When a person sees their mortgage amount far exceeding the value of their property, there’s almost a guarantee of losing money on the biggest and, historically, the safest investment most people ever make. Circumstances like that, along with banks whose hands are tied, are a recipe for strategic (or unavoidable) default and eventually foreclosure, regardless of government assistance and the very best efforts at negotiating with lenders.

Ultimately, everyone loses when fiscal responsibility takes a back seat to the homebuyer’s pursuit of luxury and the lender’s pursuit of unlimited profit.  Commonly, that ends with the person losing their home and the bank losing a stream of income while simultaneously being saddled with a property they don’t want and may have serious difficulty selling.  It might be reasonable to argue that the fault in each situation lies with the banks and the homebuyers who created it, but even accurate blame does little to help the situation which now affects nearly everyone in the country at some level or another.  Clearly, there will be more defaults, foreclosures, bankruptcies, and failed banks for the country to contend with in the near future, but such pain is inevitable now, and even necessary in order to put the nation’s housing market back on a reasonable footing.

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How have you been impacted by the first wave of foreclosures?

California REO properties are a-plenty. Interested in purchasing one?

Are you in the market to purchase a home? REO homes for sale are amazing opportunities to get the properties you want at a price you will love because the current real estate market is flooded with them. Banks across the country have had to reclaim hundreds of thousands of homes in all shapes, sizes, styles, and locales due to the double dipping real estate market.  The result? Lenders are more than eager to get these resource drains off their books, which translates into greater savings for you.  Of all the choices in the country, a CA REAO property might lend the greatest benefit for the lowest cost.

A CA REO property is an excellent choice when buying a bank owned home because of the incredible savings you can enjoy.  Unlike other states in the country, the California real estate market was one of the most exclusive and expensive before it burst in two thousand and eight. Picture lifestyles of the rich and famous: that is what the state is like from north to south.  Now, many of the elite and rich individuals who owned some of California’s most beautiful properties have come on to hard times and can no longer afford their homes. Therefore, the bank has repossessed them and they are now available for bargain basement prices to buyers just like you.

REO homes are not just all great location and good living; they are also great deals. Banks want to pull these properties off their books as soon as possible because they are a drain on resources that don’t add anything to their coffers. So they are very motivated to do what needs to be done to secure a sale, including paying for home owner’s association fees, make substantial repairs, or even upgrade elements of the house that are less that new.  There have been many reported cases of a bank repairing an entire roof, updating the appliances in the whole kitchen, or even repainting the exterior or interior to make a potential buyer sign on the bottom line.  As if California dreaming wasn’t enough, now you can get a free home makeover as well!

One of the great parts of buying a bank owned home is that the entire process is much faster than purchasing a regular home.  Because the banks are so eager to rid themselves of these burdens, they are willing to sell the property to the first somewhat reasonable offer that comes along.   And unlike purchasing a traditional market home, you don’t need to worry about paying that pesky middleman, the real estate agent, if you work directly with the lender themselves.

If you are considering going for a REO home, then you should serious take a look for a CA REO property.   California is going through a bit of growing pains now, but in the great American tradition it is promising to come back bigger and better than ever when this phase is over.  You want to be where the center of the action is and own a home that will appreciate in value significantly, and a California home will do just that.  So let’s review here: live in one of the most beautiful states in the nation, have celebrities as your neighbors, and enjoy living every day in a home that you bought for a fraction of what it will eventually be worth – where do you sign?

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Your new home is waiting for you to unlock the door!

When someone decides to purchase a home, especially for the first time or in a new way, they are often confronted with a vocabulary totally alien to them.  Like any other industry or business, real estate has its own terminology and those who work in the field somewhat unconsciously take it for granted that not everyone understands what they are saying.  All of us make this very same mistake from time to time so it is understandable.  If you are buying a home you want to be completely prepared, so studying up on the appropriate terminology is important.  If you are investigating purchasing a bank owned property, knowing the lingo is all the more critical.

There are a number of excellent online glossaries that a prospective home buyer can look over to help them get a grasp of the language of home sales.  Some are better than others but they all will help you on your way towards educating yourself.  There are a few key terms that one should know if they are going to get involved with bank foreclosures.  To aid in your understanding of why these terms are important, they will be briefly discussed in this article. Know more on Bank foreclosure listings.

One term that is often seen in different venues but is not really well understood by the public is “lien”.  What is a lien and why should a home purchaser be concerned about it?  Basically, a lien is a claim made by an individual or a company against a property because that person or company is owed money by the owner of the property.  Houses, cars, all-terrain vehicles, and boats can be found with liens on them.  Why should a purchaser be concerned?  The answer is three fold.  First, if a lien is on the property you are interested in, the debt owed to the company must be paid off before the title can be given to you.  This can result in extra costs or other financial complications during the closing.  The second side of the lien-coin is that a lien holder can force the sale of the property on which they hold the lien.  While this seems pretty straight forward – the lien holder is just trying to recover a debt – the homeowner might have a different opinion.  No one likes the idea of losing their home regardless of the circumstances, and while most people will accept the situation, some people can react very negatively.  The recent story of a homeowner bulldozing his home because it was foreclosed upon is an extreme example, but there are cases of homeowners deliberately damaging their homes in less obvious fashions.  This type of vandalism is all justified in these persons minds because they feel they are having an injustice done to them and they feel they are getting back at those who performed this perceived injustice.  As a prospective homeowner, you will want to know if there was a lien on the house because there may be damage done by the previous owners for these reasons.  Finally, a lien can prevent a homeowner from selling the property; although, this situation is not likely to make it to the point where a closing is concerned.  Fortunately, a basic title search will tell the potential purchaser if there are any liens on the property.

Bank owned homes can be a great investment at a lower than expected cost.

If you are especially interested in purchasing property that is owned by a bank, there are some more specific foreclosure-related terms that are worth knowing.  One term or item worth knowing about is a “transaction history report”.  This report is a list of all the publicly available information regarding the mortgages on a given piece of property.  Be forewarned though, these reports do not typically include information on things like mechanic’s liens (liens against work done on a property) but a title abstract will expose this information.  It is important to examine a transaction history of a property if it is available.  As a prospective homeowner, you will want to see the history of sales.  If there is an unusual pattern or a sudden string of sales, you may want to investigate further into why the home was sold as often as it was.  Perhaps there is something hiding behind the proverbial veneer of a good deal.

The third term you need to keep your eyes open for if you are interested in purchasing REO or foreclosed homes is the “notice of trustee’s sale” – especially if you are looking at a specific house.  The notice of trustee’s sale is the public announcement of where and when a house is going to be sold – usually by auction.  These announcements have to be made in a public venue in the county where the house is going to be sold.  Additionally, these announcements will include the amount of unpaid debt or other information needed for the consideration of purchasing the home.  If you are aware of a house that is bank owned and you are interested in buying it, keep an eye on the local papers for the announcement of the sale.  The duration for how long the announcement needs to be posted may vary from state to state, so double check the requirements for your market.  The last thing someone wants to do if they really like a property is to miss an opportunity to buy it at a good price.  In this case, vigilance can be rewarded.

Purchasing a home at an auction is not for the faint of heart and it is always a good idea to go in with a professional on your side.  Whether or not you deal with a more traditional real estate agent or someone who specializes in these types of REO sales is up to you.  There are various internet resources that can provide you with certain amounts of information which will help you become a better informed consumer, but they will not prepare you for the specific quirks and oddities of specific markets and the major players in those markets.  Unless you are a professional, you will probably miss something important and doing so can be very costly when real estate is involved.  While finding bank owned properties may be a fairly straight forward online search, you need to have the legal and financial backing to be ready for whatever comes your way.  While banks are looking to sell the properties they possess, they are not in the business of giving anything away.  The sale may not be cheap and you do not want to be caught unprepared.  Otherwise, you may end up missing out on an opportunity you thought you were prepared for.

Chances are very good that, if you are entertaining a REO purchase, you are in a good financial situation and you know exactly what you can and can’t bid on a property.  That is an excellent position to find oneself. Having clear limits will prepare you for the possibility for a bid war or fight and prepare you for the chance of losing that fight.  Remember to be realistic about your goals.  By being in the right space mentally and having the arsenal of knowledge and support, you will be in a very strong negotiating position.  If you know what you want and you are ready to put in the bid, you will already be in a better position than some of your competitors.

Featured home on GoHoming.com in Houston, TX available for bidding.

The real estate industry has been in a really unusual state the past few years. Flipping houses, bank foreclosures, and bank owned homes are all things that have entered into the mainstream vernacular in ways that have nary been seen previously. It has been a seller’s nightmare in many cases and a buyer’s dream in many as well.

The end result of this sad downward turn in our economical world of late is that there are a lot of foreclosed homes for sale out there. No matter which side of the coin you are on, you can not deny it has been rough going for either yourself or someone you know, which is never a unilaterally happy situation.

One of the ways to make the most out of a bad situation is to seize the opportunities that these bank foreclosures have opened up for you. Bank owned homes can be a steal for those who know about flipping houses. Or if you are interested in buying your own house to make it a home for yourself, these bank owned homes can also be a great deal for you. Know more on Bank foreclosure listings.

There are a number of things to consider when you are looking into acquiring one of these properties. A good way to keep these things sorted and in the forefront of your mind as you head out to go shop around is to create your own Homebuying Wishlist.

Here are ten things to put on your list to get you started.

Basic questions:

1. Where in the city or country do I want to live?
2. My price range is no less than $___ but no more than $___.
3. What kind of houses do I want to consider?:  one-story, two-story, townhouse or condo, or other?
4. Am I willing to do a little, a lot, or no renovations?
5. Do I need or just want the following: large yard, fenced yard, garage, patio or deck, swimming pool, special view?

Interior:

1. How many bedrooms do I need as a minimum?
2. How many bathrooms do I need as a minimum?
3. How many square feet do I need the house to be?
4. Do I need or just want the following: air conditioning, carpet, separate dining room, formal living room, separate den or library, basement, fireplace?

Community:

1. Do I need to consider the school system? Is it of an acceptable standard, within walking distance, in a safe neighborhood?
2. Are there nearby parks?
3. Is it on a major thoroughfare or can the kids go outside and play?
4. What are the neighbors like?

You will find when you are shopping around for that house that is just right for you that you may or may not be able to get every little thing that you have put down on your wishlist. But having a list will make it much easier for you to know what you want and have a better chance of getting the most of what you want out of your new house. Happy hunting!

1.  A luxurious house for those who walk on four legs

Your dogs rule the house anyway, right? And while you’re at work all day, they’re stuck at home inside. So why not pamper your pooches with a house fit for a King Charles?

Dog House

2.  A quaint little house in the treetops

Birds need a place to rest, too. This house comes complete with bird seed, nectar and a ledge to survey what’s going on below, and their feathers will never be ruffled by a pesky foreclosure notice.

Bird House

3.  Even Barbie would be impressed by this house

Did Ken just get a raise? Because Barbie is going to love this house. Three stories, staircase, views and enough room to fit all of her Barbie accessories.

Doll House

4.  A house to guide those lost at sea

A beaming beacon of hope for ships coming in late at night, this lighthouse can be seen an ocean away.

Light House

5.  Hansel and Gretel would devour this house

Who can resist a house made of gingerbread? Surely, not Hansel and Gretel, who gave into temptation and became trapped by the evil old witch.

Gingerbread house

6. A house of cards not doomed to fall

But one wrong move, and everything comes crashing down.

House of Cards

7.  No girls allowed in this house

Rock-a-bye baby in the treetop, when the wind blows, this treehouse will rock.

Tree House

8. More homely than a Port-a-Potty

When considering your next home purchase, why not go with a mountain cabin feel that most conveniently is a restroom? No promises here on appreciation, but you know what they say: location, location, location!

Outhouse

9. A House determined by population

You may have 435 roommates, but they are rather influential, and with a few servings of your famous homemade lasagna, they’ll debate that health care bill.

House of Representatives

10. A House in the hospital

Have a cold? Have a heart attack?! While this House isn’t the most cozy and comforting, he’ll have you back on your feet in no time.

House, M.D.

11. The most delicious house on this list (except for maybe the gingerbread house)

This cute little community of houses might contribute to your packing on a few pounds, but at least your house will always smell of fresh baked cookies.

Tollhouse Cookies

12.  Don’t land on this house

You’ve got to get lucky to stay away from this Monopoly establishment. This hotel can’t foreclose, but if you land on one of them on Boardwalk, your chances at winning the game sure will.

Monopoly house

And if this final house forecloses, you will have bigger issues to worry about than your housing situation.

13. America’s first house

Prime real estate right here with all of the amenities to accompany: a live-in chef, organic vegetable garden, movie theater, gym, pool, manicured grounds, round the clock security, private plane, guest houses, and more, this home is fit for a president.

White House

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There are many advantages to buying bank-owned properties – also known as REOs (Real Estate Owned). There is also a lot to consider and keep in mind when buying a bank-owned property — and it is more than what you see on infomercials and other advertisements. By taking the time to learn about the process, you can decide if this is the right type of transaction for you.

What are bank-owned properties/REOs and how do they differ from foreclosures?

REOs are properties that are returned to the bank once they have gone through an unsuccessful foreclosure auction. Generally speaking, when a property goes to a foreclosure auction, the amount due on the home includes the amount due on the mortgage, as well as any late fees, attorney fees, tax liens, and any other costs associated with the foreclosure process. If you buy a home in pre-foreclosure, or at auction, be prepared to pay for any liens that have been place on the house, as well as be willing to evict anyone living in the property. In many cases, the foreclosure auction receives no bids, which is why it is returned to the bank for the bank to sell.

Once the property is returned to the bank a few things then happen. Now that the bank owns the property, a mortgage no longer exists. The bank will negotiate with those who hold liens on the property – like the IRS, outstanding property taxes, and homeowners associate dues, etc., to have the liens removed. This should insure a clear title when the property is sold. The bank will also handle the eviction process clearing the way for an easier sale.

What you need to know when purchasing an REO property?

1. There may be some REO properties that are already listed in your local MLS. If so, you can contact the listing agent directly. If it is not publicly listed, you will need to contact the bank directly. This can be done either by calling the bank and talking to the loss mitigation department, REO Department, or asset management department – the department names will vary. With the influx of bank-owned homes currently on the market, it may take a while to get in touch with someone that can help you. You can also overnight a check to the lender for a percentage of the sales price to get their attention (with the amount to be held in escrow until the property closes, or returned should you not proceed with the sale). Just keep in mind that you should be prepared and able to buy the property you are inquiring about.
2. Keep in mind that a property that is bank-owned does not mean that the bank is willing to give it away. They are looking to make the most money possible on the deal and recoup some of their losses. If you find a bank-owned property that you are interested in, take the time to research recently closed sales in the area to make sure you are not paying more than what the fair market value is for the home. This is also good information to have if you are bidding against other parties – you don’t want to bid yourself out of a good deal.
3. Another thing to consider, if you decide to make an offer, is to take the time to have your own title check conducted through a title insurance company. This will insure that all liens, and title claims have been taken care of and there are no surprises. Though this should not be the case when purchasing bank-owned properties, it is always better to be safe than sorry. Often times there are more than one mortgage, back taxes, mechanics liens, on the property and one of these claims could easily have fallen through the cracks.
4. Don’t be afraid to try to negotiate. Since the lender already owns the property and they are more than likely anxious to sell it, they may be able to take care of some of the closing costs, or possibly reduce the asking price, interest rate, or lower the down payment. Keep this in mind when making the offer – especially if the home is in need of repairs. If you decide to put in a lower bid, make sure you can substantiate your reasons for doing so by providing repair estimates, pictures and other documentation as needed.
5. As mentioned above, get an inspection as that could help in your negotiations. In many cases, the previous owners of the property were already struggling to make the payments and most likely did not have the funds to do regular maintenance on the property. When making the offer, you can add an inspection contingency that will allow you time to have any inspections done and the ability to walk away should the cost to repair be too great. In some cases, the lender may decide to negotiate or give a credit at closing because they don’t want to have to repeat the process with the next potential buyer. Most properties are sold “as is” but that doesn’t mean you should let yourself get stuck buying a money pit if you can help it.
6. Anyone can buy an REO – not just investors. With tightening restrictions in the lending market, be prepared to put money down — do not expect to easily find 100% financing. You will also need to have a pre-qualification letter, or even better, a pre-approval letter submitted with your bid as it helps show the bank you are serious about purchasing their property. In the case that a buyer’s existing home has a great deal of equity already, it may be possible for the buyer to use a line of credit from their bank to help purchase the property. If this is your first home, be sure to check your credit report and fix any errors before getting approval for a loan to insure the best rate and terms possible.
7. Finally, you may want to consider working with a Realtor who has experience in REO property sales and prepare to be patient. One of the tricks to buying an REO by state is to find the person at the bank who can make the decision to sell the property. This can sometimes take a few days, up to a few weeks. Some of the larger banks have larger departments that deal with all REO sales, while others that are not as large do not. Also, banks are not open on evenings and weekends, so if you make an offer on a Friday afternoon at 6 p.m., don’t expect to hear anything back until the next week.

If you decide this is the route you’d like to take, remember, do your research, get your inspections, and be patient and you may get a great deal! GoHoming.com allows buyers to make an offer on REO properties the traditional way as well with our “No Time Limit Bidding” method. Read more about the REO buying or bidding process.

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