Things Buyer should Know Purchasing REO Foreclosed Property
Disclaimer: Not all items specified here should negatively impact your decision to purchase an REO property nor applicable for all banks. Each foreclosure sale is different and requires a lot of details to be handled when buying a foreclosed (REO) property. Consult with your real estate agent and/or your real estate attorney for questions regarding purchasing a foreclosed property.
DIFFERENCES:
In most parts, purchasing a foreclosed (REO) property and the process of offering, counter-offering and negotiations will be somehow different than regular (non-foreclosed) sales. There are many lender’s specific rules and requirements that require purchaser to follow.
Please note that following is a summary list of differences that I have collected during my years of experiences in real estate and I believe the REO purchasers must be aware of them. This list should be used as an educational and for informational purposes only and may not be complete.
For example; Banks may require:
1. Pre-approval or pre-qualification letter from a specific lender,
Most REO companies will not accept a contract without proof of Lender pre-approval. Most require purchaser to obtain pre-approval letter with their own bank. I have seen some banks requiring working with Lenders out of town or out of state, this causes longer time to process and resolve any issue (if any) than the local lenders.
Some purchasers feel more comfortable working with their own lenders and might have already been working with their own favorite lender and got pre-approval or pre-qualifying letters. Though, banks may be not required to get the loan from a particular lender, but just requiring it to get pre-approved letter from specific lender causes more work, takes more time and possibly hit the purchase’s credit score.
2.
Disclaimer: Not all items specified here should negatively impact your decision to purchase an REO property nor applicable for all banks. Each foreclosure sale is different and requires a lot of details to be handled when buying a foreclosed (REO) property. Consult with your real estate agent and/or your real estate attorney for questions regarding purchasing a foreclosed property.
DIFFERENCES:
In most parts, purchasing a foreclosed (REO) property and the process of offering, counter-offering and negotiations will be somehow different than regular (non-foreclosed) sales. There are many lender’s specific rules and requirements that require purchaser to follow.
Please note that following is a summary list of differences that I have collected during my years of experiences in real estate and I believe the REO purchasers must be aware of them. This list should be used as an educational and for informational purposes only and may not be complete.
For example; Banks may require:
1. Pre-approval or pre-qualification letter from a specific lender,
Most REO companies will not accept a contract without proof of Lender pre-approval. Most require purchaser to obtain pre-approval letter with their own bank. I have seen some banks requiring working with Lenders out of town or out of state, this causes longer time to process and resolve any issue (if any) than the local lenders.
Some purchasers feel more comfortable working with their own lenders and might have already been working with their own favorite lender and got pre-approval or pre-qualifying letters. Though, banks may be not required to get the loan from a particular lender, but just requiring it to get pre-approved letter from specific lender causes more work, takes more time and possibly hit the purchase’s credit score.
2.