REO (Real Estate Owned) properties are properties owned or managed by a lender, bank or government agency. These properties are sold as-is, where is. Cash is the preferred option for purchase. The utilities in REO properties are often disconnected. This means that any inspections that require the electric, water, sewage, etc. are at the sole cost of the prospective buyer (i.e. turn on the electric, gas, etc. in order to inspect the working function). In truth, REO properties are not for everyone but they can be the right property for you, under the right circumstances.
Before you even visit an REO property, it is imperative to have your financing in order. This means that you need to be preapproved from a bank or obtain a letter from a bank demonstrating your liquid assets (this can be several letters from several different banks; i.e. $30,000 from Bank A and $43,500 from Bank B demonstrating a combined liquidity of $73,500). In order to submit an offer, banks require a preapproval letter or proof of funds letter(s) as mentioned above. Before anything else – get your financing in order, but do not hesitate to contact a real estate broker if you need help in getting preapproved; or, even to ask questions.
A real estate broker can also provide you with useful guidance and serve as a valuable resource with respect to the REO process. Since REO transactions are a specialized form of real estate, a diligent and prudent buyer will enlist the help of a qualified real estate professional. Each situation and each property is different; as is, each client and each real estate broker. It is important to utilize a real estate broker that has experience and expertise with respect to REO properties.
Bottom-line: a qualified real estate broker can greatly assist buyers in the REO process. Find a qualified real estate broker who will help you get preapproved and understands REO real estate. This could be the start of something great!