In many parts of the United States buying a foreclosure is en vogue. Buyers flock to these properties because they are allegedly a great deal. But, are they?
While each and every foreclosed property listing is different, there are quite a few considerations with respect to purchasing a bank-owned foreclosure (REO). And, sadly, not every bank-owned property is a great deal!
Here are some things you may want to consider when purchasing an REO:
- In parts of the United States, there is great competition for REOs. Do you really want to compete against so many other people to buy the foreclosed property? (Competition drives up the purchase price.)
- Are you qualified to go high enough in your offer to compete with the others or is your first offer your highest and best? (Again, competition drives up the purchase price.)
- Will your offer be strong enough? (If you are obtaining an FHA or VA loan and putting little to no money down, your offer may not–unfortunately-be competitive.)
- If you are financing the property, will the property pass inspection? Fixers, for example, may not pass inspection. (FHA and VA loans require a property inspection and the property must meet specific guidelines.)
Food for thought! The REO’s aren’t always the best deals – we have seen that time and time again. Determine what your are looking for and weigh all your options carefully – don’t get locked into the thought that you have to buy and REO to get a great property at a great price.
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