We see them everywhere these days. In every type of neighborhood. They are also accounting for many of todays transactions.
In short an REO closing or purchase is one in which a lender or bank is reselling property following foreclosure. The property is usually one of many or even thousands in the banks asset portfolio. Becuase of this they can be prone to surprises.
Some things to know as a buyer are: you are not dealing with a warm blooded seller when you are trying to purchase an REO. You are dealing with an institution and asset manager. Banks do not have an emotional stake, so they are unlikely to enter into complicated negotiations or be swayed by a buyers hardship. They will look at the highest and best offer and prefer all cash offers. Less complication means a better chance of getting the property off their books.
Typically an asset portfolio manager will have never seen the property and have little to no knowledge about it. Hence it is the banks position to give little to no assurances and make as few representations as possible regarding the property. Do not be alarmed by this. Have a qualified home inspector out to put your mind at ease.
A banks lack of emotional attachement means to a buyer: no lingering responsibility, bi tax prorations, no follow up calls to find the water shut off valve, etc.
It is also necessary to have the title researched to rid the home of previous liens and to buy a owners title insurance policy at closing.
Three things to do when purchasing an REO:
Make new keys -no telling how many people have had them.
Buy a home warranty-If you are not a handy person and have a good idea of how to do repairs , buy one.
Check the title early on. Make sure the listing agent provides you a clean title report prior to closing in case there are any surprise liens that need to be cleared up.
Good luck and Happy Buying-There are many great deals out there right now!