Is it bad to buy a bank owned home?

Is it bad to buy a bank owned home?

Bank owned homes—aka foreclosures can be a great deal, but buying one isn’t without risk, so make sure you know what you’re getting into. Bank owned homes are still flooding our nation’s real estate market. For buyers who can handle risk, some are incredible deals.

What is the difference between REO and bank-owned?

An REO (Real Estate Owned) property, also referred to as a bank-owned property, has already gone through the foreclosure process and the mortgage lender or bank has taken ownership of it as a result of a failed foreclosure sale in an auction. The bank becomes the owner of the property.

Is buying an REO a good idea?

Buying an REO home can be a good idea because houses are usually priced low. To do this, lenders will often list the home at a lower price, drumming up multiple offers and giving themselves the ability to choose the least risky option.

Are REO properties negotiable?

Banks have to answer to shareholders and investors, so they will attempt to sell an REO at competitive market price. As such, they may counter your offer. Remember however, that you’re dealing with a bank, so more than just the price is negotiable. Similar to a foreclosure, some REOs made need extensive repairs.

What is transfer value on a bank owned property?

The Transfer Value refers to the purchase price of the property the last time it transferred ownership. If the property is an REO, the Transfer Value is referring to the amount the foreclosing lender “paid” to repossess the property.

How does an REO sale work?

A bank-owned or real estate owned (REO) property is one that has reverted to the mortgage lender after the home fails to sell in a foreclosure auction. Once the bank owns the property, it will handle eviction (if necessary), pay off tax liens and may do some repairs.

What is the difference between REO and short sale?

REO, or real estate-owned, refers to a property that a mortgage lender acquired through a foreclosure. It’s owned by the bank. A short sale refers to a situation where the sellers still own the property but they can’t sell for enough to pay off the mortgage(s) and costs of sale.

Which bank has the most REO properties?

Most large banks also have their own REO foreclosure listings, too:

• Wells Fargo.
• M Bank.
• Ocwen.
• SunTrust.
• BMO Harris.
• Chemical Bank.
• Bank of America.
• BB.

What happens if REO property is occupied?

An REO occupied property is a home that is owned by a lender while still being occupied. Typically, the REO management company (hired by the bank) will offer the tenant cash-for-keys prior to its auction so that the property can be sold as vacant.

How does a property become REO?

An REO (Real Estate Owned) property is a home the bank owns after a foreclosure or deed in lieu. In the majority of cases, the bank will be the high bidder at the foreclosure sale. If the bank is the winning bidder at the foreclosure sale, the property becomes “REO.” REO stands for “Real Estate Owned.”