Buying Foreclosed Houses

Times are rough with nobody knowing what will happen tomorrow. But one thing is certain – this is the right time to buy reo homes. Banks are more than eager to get rid of their innumerable reo houses and as such are offering huge discounts. REO property can be bought at auctions, from a realtor or from the steps of the courthouse. Each step has its pros and cons.

By surfing through the websites of auction companies one can get to locate the foreclosed units of choice. Buying at an auction sometimes means saving 60 to 70 cents on the dollar. One does not have to worry about the title or past dues and unpaid taxes. There are many attractive houses and most of them are in good condition. The process of buying at an auction takes a comparatively longer time. The bank takes about a fortnight to decide whether to accept or reject the highest bid. The buyer has to put in a lot personal effort to check on the house and comb through papers.

A realtor could guide the buyer as regards foreclosed houses but this too takes time as one hops from one property to another. The realtor however is more experienced than the individual buyer and will know where to and where not to knock. Moving forward to buy a foreclosed house through a real estate agent is more conventional and comfortable. A point to bear in mind is that there is more equity to be found in old and distressed reo listings than the new ones.

The buyer can purchase in auctions held on the steps of courthouses. These units are listed in the newspapers. The price is the lowest in the market but there may be due taxes and liens on the property. These will have to be cleared. There might be pending repair bills of contractors to be paid. Thus it is difficult to calculate the actual cost of the house. Often the property is in bad shape. Foreclosure victims tend to vent their frustration and anger on the unit before leaving. Even if they do not, one thing is sure – the financial condition of the previous owner was such that it did not permit regular repairs. Another problem is that outsiders often move in to vandalize vacant houses. Sometimes it so happens that the house has no value and it has to be demolished. The only thing of worth is the land. All these have to be weighed before bidding at court auctions.