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Buying Short Sale or Bank Owned/REO Properties

Are short sale or bank-owned/real estate owned (REO) properties good purchases?

In this economic climate, there may be deals to be had when it comes to purchasing a home where foreclosure is imminent, or the home has already been foreclosed upon.

When a foreclosure may be imminent, a seller may attempt to sell his home through a short sale. A short sale means that the bank will accept a sale price that is less than the amount owed on the property. There are several requirements the seller must meet before this can happen, and this is usually the last step a seller will take to avoid foreclosure on his property.

A bank owned (or Real Estate Owned) property is where the home has already been foreclosed upon by the bank, but it ends up in the bank’s inventory as they have yet to sell it.

Both of these situations can make for a potential deal when it comes to buying a home, but there are some things you must consider before making this choice:

Most short sale properties are priced aggressively low which may cause a bidding war with multiple buyer offers coming in at one time. It is important to have a clear game plan when considering a short sale purchase. Our team of realtors are skilled and experienced in helping buyers put together a strategy that will give them the best chance of finding a deal on a home. Contact us for details.
Remember that in most cases (including short sales AND REO’s), properties are sold “as-is”; meaning you will not have the opportunity to request repairs to be made to the home you’re purchasing prior to closing escrow. Occasionally in an REO property, the bank MAY consider including repairs on major items such as air conditioning, heating, or items that may cause safety or health issues, but these are done on a case-by-case basis, and all banks have different criteria when considering these repairs.
Lastly, unless you’re making your purchase as an investment or rental property, make sure you buy a home that you love and want to live in. Remember that home prices have not begun to see a rise in value, so it’s best to make a wise purchase that you plan to keep for a while until property values return to their normal rate of yearly increase (typically 3-5% per year).
For more information, or to obtain a list of the latest short sale and REO properties available for sale, go to http://bringingyouhomescv.com.

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