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Orange County, Indiana Homes For Sale. Find a Wholesale Bank-Owned REO in Orange County, Indiana, IN:Featured Topic: REOIt is common for a few veteran and experienced agents to control a majority of REO listings in an area. REO offers are usually FAXED to the bank because the listing agent needs your originals and there is no formal presentation so keep in mind nothing happens evenings and weekends because banks are closed. Many times homeowners get in over their heads when it comes to purchasing a new home. If they have taken out a loan from the bank and are unable to make their payments their home will be turned over to the bank. From there the bank will place the property on the market for auction or sell. These types of properties immediately become REO Properties and are generally a steal to catch. With the currently low interest rates this is an optimum time to finance REO's for long term hold and cash flow. Most offers made on REO properties that contain the phrase and or assigns will not be considered by the bank or the REO listing agent. A large number of novice investors are making offers on REO properties without understanding their true market value. Sometimes banks will pay for repairs on REOs, but typically will not agree to do so at the offer stage. If there are problems found during a home inspection, renegotiate after your offer has been accepted. From 2004 through 2005, home-sale activity surged toward a peak in most U.S. metropolitan real estate markets. The feverish market activity lured a long line of individuals to obtain a real estate license, with the hopes of cashing in on the booming sales REOs with swimming pools typically have empty or half empty pools that will require repair to the plaster, tile, electrical and pump equipment. This along with a smaller buyer group, increased liability in a hold situation and higher insurance will keep many investors from bidding on pool homes Discussing cash flow numbers and formulas with you CPA or real estate lawyer is a good idea to fully understand the long term tax implications of a buy, rent and hold REO deal. If Fannie Mae knows of any hazards on REO properties they own or market, they disclose this information through their real estate listing agents. However, they may not have been informed by the previous owner of all hazards. They encourage you to have the property inspected by a professional before you buy. REO buyers should be aware of the following FHA loan qualification guideline: Last two years Income should be the same or increasing. Remember that these guidelines are subject to change at anytime and you should stay abreast of current loan programs. To attract buyer's agents, many banks offer a larger percentage of the commission to the buyer's agent while discounting the REO listing agent's commission. 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. The competition and short time on the market before and REO goes pending has many REO buyers feeling discouraged. But many of these escrows will not close and the REO house will be back on the market. It is important to consider quality when buying an REO in this market. A quality home in a quality area in good condition will produce a higher quality renter and improve vacancy rates, cash flow and appreciation over time. This may be more costly initially and take more work to find but will pay dividends at the end of the cycle. REO tip....Take note of the condition of the top sold comps in your area and try to estimate your repairs to the market standard. Over repairing can eat away at profits and under repairing can take your property out of consideration for top buyers. An REO property allows you to gain access to the property for an inspection. Lenders have a responsibility to their shareholders and they lose money on non-producing assets. There are some downsides to REOs. While REOs are sometimes touted as real bargains, the lenders know very well what they're worth and will drive a hard bargain to ensure they are getting as much money as possible from the sale. |
