Category Archives: REO

Congratulations NRTDA REO Sales Team!

Posted on December 8, 2011 by | Leave a comment

Congratulations NRTDA agents  Carol Nagel, Liz Baska and Michael Lamb on being the top winners in the Rialto Raffle Contest for November.  The 3 sales associates are experts in selling bank owned assets and have made sales happen for 2011.

 

→ Leave a comment

Posted in Company news, REO

Debunking the top five myths about REO properties

Posted on July 29, 2010 by | Leave a comment

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.

→ Leave a comment

Posted in REO

Buying Bulk and REO Provides Opportunity and Risk for the Investor

Posted on April 13, 2010 by | Leave a comment

By: Holly Rabits

David Fletcher, a columnist with Realty Times, stated in a recent article, “Purchasing units in fractured condominiums in bulk may prove to be a smart investor ‘play’ in today’s market, especially if the asset has a multiple number of lenders selling individual units in the same property.” The strategy according to Fletcher is to purchase a large number of units from the developer, then purchase other bank-owned units in the same community to lower the total price per unit.

This idea works well in today’s market especially if the investor plans to re-sell the units because it gives flexibility in pricing and allows the investor to offer the units at below market pricing and have control of the units for sale in the property.

I am in agreement with Mr. Fletcher on this idea and also agree that an investor does not have to wait for the market to bottom out because the average cost of the bulk sale and REO is close enough.

Of course the investor also has to be careful about the laws pertaining to successor developers and the financial ramifications that can result when purchasing more than seven units in any single property.

With this said, it’s still a great opportunity as the cash flow often works for a ‘buy and hold pattern’ or selling to first time buyers, if financing is available, or to second home owners who want to have an inexpensive place in Florida.

We are beginning to see this happen in fractured condominiums in Florida whereby an investor wants to buy bulk and has already purchased REO units. From NRTDA’s point of view, it also works because it allows us to come in and staff a property and develop a re-launch program that is deemed to be more successful because we are not competing with REO or other bank assets. The sales process and pricing becomes more stable allowing for better buyer perception.

Still, with this all said, the association fees need to be in tact and the property purchased should always have a thorough inspection. Look before you leap! With any opportunity there is almost always risk. When will we ever see these prices again? A thoroughly calculated risk with thorough due diligence can most probably prove to be very successful for investors.

→ Leave a comment

Posted in REO

Friday Five: Advantages of buying a foreclosed home

Posted on April 2, 2010 by | Leave a comment

By: Brad Horner

The National Association of Realtors recently reported that sales of distressed properties, including foreclosures and short sales, made up 38% of home sales in January 2010 and 35% in February 2010.  There are many reasons that homebuyers and investors alike continue to flock to foreclosed homes; below are the top five advantages:

  1. Price is the obvious first advantage, as foreclosed homes are sold by highly motivated sellers – banks – which often list homes below market value.  In addition to being bargains for owner-occupied residences, foreclosed homes are often sought after for vacation homes or rental properties, as they provide a cost effective entry into real estate investment.
  2. Banks may be more likely to finance foreclosed homes that they have listed, as they have an interest in selling these homes in order to eliminate the costs associated with owning them.
  3. The foreclosure purchase process isn’t very different than the traditional home buying process.  Experienced Realtors can help buyers find foreclosed homes, analyze the market value of a foreclosed home of interest and prepare the offer.
  4. Many foreclosures are brand new construction single-family homes or condo units; therefore they still provide the opportunity to be a home’s first owner.
  5. Purchasing a bank-owned property is considered to be a safe deal for inexperienced foreclosure buyers, as much of the buying risk is eliminated since there are no back taxes owed, no liens on the property and no tenants to evict.

Bank-owned properties are easy to find, as many banks have them listed on their Web sites.  Or you can also visit www.CBBankOwned.com to view nearly one thousand bank-owned new construction homes in Georgia and Florida markets and also learn about upcoming open houses.

→ Leave a comment

Posted in Bank Owned, Foreclosure, Friday Five, REO

To Extend or Not to Extend?

Posted on October 9, 2009 by | 1 Comment

By: Judy Price

Estimates place the overall number of new homes purchased with the first-time home buyer tax credit at 1.2 Million, with 400,000 homes bought by those who would have never done so in the first place. With the credit set to expire on November 30th, the debate about its extension now goes all the way to Capitol Hill.

This week, Congress did vote to extend the 8K tax credit for the next year to servicemen and women who actively served overseas for three of the last twelve months. This bill now moves on to the President. What remains to be seen if the extension will apply to all first-time buyers or beyond that to all home purchasers.

The market data continues to show signs of hope. On September 29th, the most recent Case-Shiller indices reported that the data from July showed house prices in the United States increasing for the third month in a row. And the August Pending Homes Sales Index posted its seventh consecutive monthly gain in August, the highest reading in 2-1/2 years. In my previous post,  I expressed concern over unemployment’s effect on recovery. Almost 10% of our population is more concerned about finding a job over purchasing a home. It sounds as if we’re stuck in a catch-22. Since housing is such a large part of our economy, it would make sense to continue to provide ways to stabilize it. But if the unemployed cannot qualify for a loan, they won’t have an opportunity to take advantage of the tax credit, resulting in a prolonged recovery in the housing market.

Interest rates remain low, and for those who can make the move, it remains a great time to buy. Would an extension of the tax credit result in another 400,000 new purchases that could boost the economy? I say we should give it a try. As bipartisan support for the extension gains momentum in Congress, it is possible that six-twelve more months of the tax credit may be on the horizon.

→ 1 Comment

Posted in Bank Owned, FHA financing, First-time homebuyer, Real Estate, REO, Sales and Marketing

Tagged , ,

Advantages to Buying an REO Property

Posted on August 30, 2009 by | Leave a comment

We’re currently experiencing a buyer’s real estate market and REO homes are top targets for many homebuyers. REO homes – or homes that are being sold by the original bank lender, as opposed to the homeowner – are a great way to get a bargain for owner-occupied residences or investment properties.

There are many advantages to purchasing an REO property:

 - Banks are in the banking business, not the real estate selling business, so they’re often anxious to get them off their books. Therefore, REO homes are often listed – and sold – below market value, which allows buyers to purchase much more home for the money.

 - And many banks may be more likely to finance a home they own, as they have an interest in unloading the home in order to eliminate the costs associated with owning the home.

 - The process actually isn’t that different than purchasing a home via the traditional home buying route. Align yourself with a knowledgeable real estate professional to help you determine how much home you can afford, analyze market value of the home you are interested in purchasing and prepare your offer. Once you submit that offer, you will still have the opportunity have the home inspected so you can come to the closing table feeling confident about your purchase.

 - Many REO homes are brand new construction single-family homes in beautiful communities or modern high-rise condominiums with the latest technology and in-demand features. 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.

→ Leave a comment

Posted in Bank Owned, Real Estate, REO, Uncategorized

Tagged ,

How Does the REO purchase process work?

Posted on August 27, 2009 by | Leave a comment

“How the does REO purchase process work?’  that’s a question we’re asked quite often at Coldwell Banker NRT Development Advisors.  Though the process may seem daunting at first, it’s really not that different from the traditional home purchase process.  And the payoff can be big.

REO stands for “real estate owned.”  When a buyer cannot keep mortgage payments current and therefore a bank takes over as owner of the property, the property is considered REO.

Following are the five main steps to purchasing an REO property.

Step 1:  Get your financing in order.  When considering an offer for an REO property, banks will look at many factors in addition to the asking price – including pre-approved financing, substantial downpayments  and credit history.  Consult with your tax or financial advisor in advance to assess your financial situation and determine your target price range.

Step 2: Make an offer.  While banks are often motivated to sell REO, they’re not going to just give homes away.  When you find the ideal REO home for you, come prepared with a realistic offer in order to be taken seriously as a buyer.  A buyer’s agent can help you put together an acceptable offer that takes into consideration current market condition and comps, meets the requirements of the lender, and still offers you – the buyer- real savings.  Make sure your offer includes an inspection and appraisal contingency that allows you to withdraw should the inspection reveal major problems.

Step 3: Make the most of the escrow period.  Just like traditional real estate transactions, buyers have the right to back out of the contract within the contractual time if they find something wrong with the home, so make sure that you know what that time frame is.

REO properties rarely come with a seller’s disclosure, as the actual seller is now the bank, which hasn’t lived at the property to know the day-to-day conditions.  Therefore, it’s wise to have an inspection done.  If you find something wrong, most REO contracts will include a right to cancel and receive your deposit back within a set period of time, which is often 10 days.

But due to the current economy, REO properties run the gamut of conditions.  So many of the REO properties on the market now are new construction homes that don’t carry any baggage of past owners.

Step 4: Be prepared for the waiting period, and possible a counter offer.  Buyers must recognize that they are dealing with a large group of people and not just one seller; therefore buyers need to be patient throughout the REO purchase process.  It may take as few as 7 days or as much as two months before you hear back from the bank.  The listing agent should be able to provide insight about how long the process will take with the individual bank.  Ofter, banks will counter the bid, in effort to receive a higher offer to cover their costs and also show investors that they’re attempting to get the highest price for the property.

Step 5: Get ready for a quick closing.  Once an offer is accepted, the bank may need four to five days business days to obtain final approval.  But once the offer is approved, the closing process will move quickly.  Many banks will ask for a closing within 10 to 30 days, and then it’s home sweet home!

→ Leave a comment

Posted in Bank Owned, REO

Tagged ,