Once again Leslie has written a fantastic blog post regarding REOs! There is some great information if you are considering an REO and a little of the process involved. Thanks so much, Leslie, for this post and allowing us to reblog!
Who is sitting in the cat bird seat these days for a home purchase? Who will be catered to, indulged, flattered and coddled on a pleasant journey to a home closing that can be bragged about for years? Think again if you said “the buyer” if the house is a foreclosure or REO property (REO stands for Real Estate Owned).
Today’s qualified home buyer is a rare bird. He struts with expectation of recognition of his specialness. After all, market inventories are high and prices are low. Today’s home buyer thinks he is doing the bank a favor — making a grand gesture — saving the US economy — by offering the bank a chance to unload the REO home.
The fact is that to a bank the buyer is only a very small cog in the machine of REO disposal. That’s right, “disposal”. The seller of a bank-owned property is trying to get as much money as possible in as little time as possible.
There is nothing personal or accommodating about buying an REO. The home may as well be scrap metal.
Today’s buyer needs to know some important things before he thinks about buying an REO :
– the property is sold “as is”
– there are no disclosures about condition of the home
– property taxes will be prorated at 100%
– surveys and tests are the obligation of the buyer
– the home may be distressed to the point of being dangerous
The asset manager controls the purchase of an REO. I am sure most of these asset managers are nice people in the privacy of their own homes, but at work they are not flexible about their contracts, addenda and schedules. The asset manager doesn’t care about your school year deadlines, your loan officer’s vacation. or even your Realtor’s obligations to comply with license law. The asset manager is disposing of an unwanted asset.
Buying an REO can be like the buying and selling of scrap metal.: buy low, sell high, and don’t get emotionally involved. Never, ever, confuse the REO seller with a person who cares about the idea that you’re looking for a home for your family. The buyer is not in the catbird seat, he isn’t cock of the walk, and he certainly isn’t in control of the transaction.
I have worked on enough REO deals now that I can show many examples of successes and failures to a prospective REO buyer. If you’re thinking of buying a foreclosure, choose an agent who has been through the cycle a few times….won a few, lost a few and can speak to the realities of buying scrap metal — I mean an REO — in today’s market.
This post was written by Leslie Ebersole of Baird & Warner Real Estate.
If you would like more information about the Chicago Western Suburbs and the Fox River Valley
St. Charles, Geneva, Batavia, Wayne, Elburn, and South Elgin