Future Finance Solutions
Kuba Jewgieniew

Consider the Details Before Completing an REO Property Purchase

July 25, 2014 by · Leave a Comment 

Prospective buyers often identify information about foreclosed real estate from the county recorder’s office in a location of interest. The county is responsible for the conduct of foreclosure auctions, and these auctions are often held at the local courthouse.

Most auctions are advertised in the legal section of the newspaper. When the property doesn’t sell in an auction, the bank-owner must sell it. Prospective buyers can learn the identity of an REO property by researching legal auction notices. It’s important for the buyer to adjust expectations about foreclosed properties and REOs:

Foreclosure

If the new buyer purchases a foreclosed property at auction, the prior owners might still live there! In many cases, the new owner must initiate eviction proceedings. In comparison, REO properties are typically unoccupied and ready for the new owner to move in if he or she desires.

Property Condition

A property owner facing foreclosure isn’t concerned about maintenance or appearance of the home, condo, or building. Because foreclosure may be a lengthy process, many repairs to the property may be required. Request of a property inspection before purchase is an essential step for the foreclosure or REO buyer. It’s important to identify all the problems and create estimates for the necessary repairs.

Plumbing and Broken Pipes

The property may be vacant and, if located in a Northern U.S. climate, not winterized. Freezing winter temperatures can mean broken pipes or other large plumbing problems as a result.

Landscape and Exterior Condition

Similarly, the previous owner probably stopped worrying about the condition of the yard. Perhaps the lawn hasn’t been watered for months. Shrubs and trees may need care or removal. The cost to landscape the property can cost thousands of dollars, so it’s important to consider this before placing an offer on the property.


 

Kuba Jewgieniew is the CEO of Realty ONE Group, headquartered in Irvine, California. Named one of America’s top brokerage firms by REAL Trends, Realty ONE Group is ready to apply its data-driven approach to the purchase or sale of your home.