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New Jersey, NJ Houses For Sale. Find a Wholesale Bank-Owned REO in New Jersey, NJ:Feaured Topic: REOMuch of the REO inventory has been vacant for a long period of time and need repairs making great fixer upper deals abundant. Once you make an offer to purchase a REO, banks generally present a counter-offer that may be at a higher price than you expect, but they have to demonstrate to investors, shareholders and auditors that they attempted to get the highest price possible and you should definitely plan to counter the counter-offer. FNMA is offering special financing on their REO inventory properties. The benefits of Fannie Mae Home Path Special financing include low down payment and flexible mortgage terms. Many factors are often overlooked by investors when calculating positive cash flow on an REO rental property such as repairs, maintenance, taxes, insurance, municipal fees, vacancy and a host of other potential fees and costs. REO listing agents are often skeptical of an investor that has taken a weekend seminar and makes uneducated offers. When offering on long term cash flow REO's, it is important that investors consider the long term viability of the neighborhood as it relates to local economy, employment and desireability When buying REOs from a lender the investor must submit their offers on standard realtor forms. The banks do not like to see custom investor looking contracts. A vacant REO only depreciates in value and is a liability on a banks ledger sheet. Investors wanting to buy and hold section 8 properties must improve the property to comply with section 8 inspection guidelines. Budgeting for monthly maintenance issues such as gardening, is important in calculating cash flow on an REO as certain items must be maintained by the owner. Fannie Mae does not warrant or guarantee any work that may have been done on an REO property, whether as part of its efforts to sell the home or pursuant to conditions in the purchase contract You do not have to use Fannie Mae's selected title, settlement, or escrow companies on an REO purchase. You may designate the title, settlement, or escrow company of your choice, subject to the terms of the contract. Expect the bank to draw its own REO purchase contract or addendum to your standard purchase contract. Read it thoroughly and ask a real estate lawyer for advice if you do not understand it. Fannie Mae and Freddie Mac have announced that they will implement a revised Home Valuation Code of Conduct effective May 1, 2009. This will have an effect on REO purchases made with loans. An REO can be a good opportunity to get a property below market value, with a clear title and free possession. Purchasers of single-family foreclosed REO homes offered through Freddie Mac’s HomeSteps division will receive a comprehensive two-year home warranty paid for by Freddie Mac, the company announced Monday July 20th. 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. REO tip.....Be sure to have a clear picture of your hold time and what the actual hold cost is. Be sure to include market decline. Banks cannot legally sell real estate directly to the public, so they enlist the services of a real estate broker to list the home for sale. Real estate brokers in turn with the REO manager within the bank to negotiate through an offer. REOs are properties that the lender has failed to sell at auction. At this point, since the home has gone back to the lender, the mortgage no longer exists. |
