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Lake County, California Homes For Sale. Find a Wholesale Bank-Owned REO in Lake County, California, CA:Featured Topic: REOWhen making an REO purchase, it is important to understand market value in your chosen area. In a foreclosure situation, the amount owed to the bank is almost always more than what the property is worth, very few foreclosure auctions result in a successful sale and the property instead reverts to the bank, thus becoming an REO, or Real Estate Owned property. In a REO situation, a bank will typically set the opening bid at a foreclosure auction for at least the outstanding loan amount and, if there are no bidders that are interested, then the bank will legally repossess the property, and as soon as the bank repossess the property, it is listed on their books as REO (Real Estate Owned) and is categorized as an asset (non-performing). Many investors make the mistake of waiting for the television to tell them that the bottom of the real estate market is here while the REO market is providing cash flow opportunities right now. It is important that REO buyers have a realistic idea of what repairs will cost on the houses they offer on. REO investors must develop a method of appraising current market value and after repaired value on the homes they offer on. Most REO agents work for one or two banks. Some listing agents are exclusive listing agents for REOs, and they do not list any other type of property. Since REO agents deal in volume, they typically apply the same pricing principles to all their REO listings. It is common to see holes beat into the drywall of REO homes. Many REOs are secured by an electronic SUPRA box and cannot be accessed by a number code. An investor must have interior access to a home to make a repair estimate. When selecting a buy an hold cashflow property, take care to think about what areas you would like to own homes in 5 years from now. It is important to consider this and not just buy the cheapest deals. Fannie Mae's HomePath database includes only properties that are owned by Fannie Mae A loan prequalification for an REO purchase doesn't mean your loan is approved. You must apply for a loan separately, after you are prequalified and your purchase offer is accepted. The bank does not want to sit on its inventory. Since it did not receive its minimum bid from an investor or home buyer during the foreclosure sale at the courthouse, the bank is likely to price that REO home for less, just to get rid of it. Banks may require a cash REO buyer to show proof of funds. This rules out obtaining a refinance on a residence unless the money is already in the bank. Many investors shy away from REO properties or HUD homes because they feel they have less negotiating power or simply lack the capital to make aggressive offers and play along with the rules that REO lenders stipulate. Buying an REO property is not a simple and straightforward as some imagine. Banks may verbally accept your offer, while trying to find a better offer. When looking for the cheapest REOs, an investor should go out and really see the areas and inventory. Usually there is a reason for the low pricing. That does not mean that there are not super deals but the listing agents are pricing according to area, desirability and condition. They are looking to dump the house quick and you don't want a lemon REO. Many REO investors do not realize the large number of homes that have gone back to banks but remain unlisted will eventually hit the market and have an impact on price. Buying a bank-owned or REO property may take an equal amount of time and angst, but the property will be vacant and easier to inspect. If you've been looking at foreclosures but are unsure whether you want to risk your money on a property you can't inspect or know what might be hidden behind the low price, you might want to consider a real estate owned property. Real estate owned (REO) properties can be a better option for people who want to have all the information before deciding to buy. |
