Debunking the top five myths about REO properties

By: Amber Cooley

REO homes – or bank-owned homes – continue to be in demand for homebuyers searching for a great deal and investment opportunity.  Many potential buyers have the similar questions in the buying process due to the common myths about REO properties.

Let’s take a closer look at the top five myths about buying a foreclosed home and then address why these perceptions aren’t 100 percent true.

1. You cannot have an inspection done on REO properties. You absolutely can – and should – have an inspection on an REO property that you’re interested in buying.  Just like with a traditional home purchase, you want to go to the closing table feeling confident because you understand the condition of the home you’re purchasing.
2. REO properties may come with liens. When closing on an REO property, you will leave with a clear title with no liens.  In fact, a homebuyer couldn’t close on a home purchase if there were existing liens.
3. You don’t have any negotiating power when dealing with a bank. In reality, banks will negotiate closing costs, condo dues, home warranties, appliances and more.  Work with your real estate agent to put together an appropriate offer that takes into consideration current market condition and comps, meets the requirements of the lender, and still offers you real savings.
4. REO properties need lots of repairs. Actually, many REO homes are brand-new construction single-family homes in new communities or modern high-rises. So they’re the same homes that many buyers are looking for, only they’re on the market for only a fraction of their original values.
5. Buying an REO property is complicated. With the help of a real estate professional who is familiar with the REO process, buying a bank owned home is actually very similar than the traditional real estate transaction.  Interested buyers can expect quick turnaround times from banks once an offer on a home has been submitted.  In some cases, they will hear within 24 hours of an offer being submitted.

For more information about buying a bank-owned home, visit www.cbbankowned.com.  There, you’ll find additional tips about the REO purchase process, as well as listings of hundreds of new construction REO properties.