by Linda Payne (9/29/09)
Purchasing a Real Estate
Owned (REO) home is an excellent option for many home buyers. They can provide
affordable homes for college students and first-time buyers who are currently
spending their money on rent instead of investing in owning their own
properties.
The unfortunate
circumstances of the recent economic conditions have caused many people to lose
their homes because they simply could not afford to pay for them. These homes,
taken back by banks and other lenders, go into foreclosure. If they aren't sold
during a foreclosure auction, they become what is known as REO homes. These
homes are usually priced lower than the original loan amount, because they exclude
expenses such as attorney fees and interest. Also, lenders generally remove all
second and third liens on the property, delinquent taxes, HOA fees, mechanics'
liens, etc. Since banks and other lenders are not in the business of
maintaining homes, they are eager to sell REO homes and are more willing to
negotiate on the price.
A concern that some people
have about REO homes is that they may have been neglected and in need of
repair. However, informed home buyers know that the savings often far outweigh
any cost of repairs. Also, many home buyers are able to qualify for an
affordable FHA financing that includes the cost of the home and the cost of
repairs–all in one loan. Plus, just like other home purchases, buyers are
entitled to hire an inspector to find out exactly what's wrong with the
property and what needs to fixed before purchasing an REO home.
With an REO home, you can stop
paying rent, lower your current monthly mortgage payments, upgrade your
lifestyle, or invest in your future.And with new online REO auction websites, it's easy for anyone to
find and purchase an REO home. GoHoming.com, for example, gives buyers detailed
information, photos, and documentation on REO homes to help buyers make informed decisions.A unique benefit to purchasing a home at auction on GoHoming.com is that buyers can
see what other people are bidding for a property and what the highest bid is.
That way, they know what the competition is and can feel confident that they're
getting a fair market price.
Whether you're a first-time home
buyer, a recent college graduate, a novice investor, or all of the above, REO
homes are great for anyone in the market for a new home. There's a reason why
investors and property managers have put their money into REO homes for years:
you can get some fantastic deals from the REO home sellers.
Fair Housing and Equal Opportunity
