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Guilford County, North Carolina Homes For Sale. Find a Wholesale Bank-Owned REO in Guilford County, North Carolina, NC:Featured Topic: REOWhen making an REO purchase, it is important to understand market value in your chosen area. Banks do not want to see a lot of proprietary disclosures with REOs; they are exempt from the California Seller’s Transfer Disclosure Statement (TDS-14) and if there are real estate agents involved, either representing you or the bank, those agents are required to provide you their disclosure statements. 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). This is the optimum time to learn about REO's and cash flow as there will be a large transfer of properties needed to liquidate the bank owned inventory. REO buyers must prove themselves to be dependable and trustworthy to REO listing agents to gain an inside advantage and develop a long term business relationship. A large number of novice investors are making offers on REO properties without understanding their true market value. The only time the deposit check is cashed in an REO offer is when the offer has been accepted. Some REO listing agents are able to convince the bank to put out some money for repairs so they can sell the property for the maximum amount. Many vacant REOs are subject to code enforcement citations by the local municipality creating an even larger potential liability for the bank that owns the property. It is important to understand the standard amenities of homes in an area before determining rehab costs on a cash flow rental home. You should also consider hiring a qualified professional to inspect an REO property, whether it has been repaired or not. Hiring a home inspector is a recommended practice, no matter what type of home you buy. Fannie Mae depends on the expertise of local real estate sales professionals and accepts offers only through their real estate listing agents. You may work with any real estate sales professional to submit an offer to the real estate agent who has listed the REO property. Some REO Homes do not qualify for conventional financing. Mortgage underwriters may turn down a loan from an otherwise qualified buyer if the property requires too much work to meet health and safety codes. A conventional buyer's offer with 20% down, however, will typically beat out an offer from a buyer obtaining an FHA loan. REO Homes, because they’re sold in “as-is” condition, can often be a great, affordable opportunity for the fixer-upper. Usually the Bank won’t accept an offer directly from you. Banks accept offers only from a real estate agent or broker. In their efforts to create a bidding frenzy, many REO agents will claim that they have 10, 15, 20 or more offers on a REO house when in reality their are only a few offers that the banks would consider. Don't be discouraged by this kind of talk and submit your educated offer. Being a slumlord can be costly in a market where local municipalities are looking to impose maximum fines on landlords to generate income. This should be considered when making an REO purchase for hold and rent. REO tip....take extra care to estimate repair costs on the lower priced inventory. There is usually a reason for the low list price and many times it is a costly or loan killing defect. A common misconception is that foreclosures and REOs are the same. Although they are similar they are in fact different with the REO being the direct result of a foreclosure option sale. An REO is a property that has been foreclosed on and has reverted back to the ownership of the bank or lender. 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. |
