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Harrison County, West Virginia Homes For Sale. Find a Wholesale Bank-Owned REO in Harrison County, West Virginia, WV:Featured Topic: REOIn general REO contracts are not assignable so the investor must have a means to fund the transaction. Even though you agreed to buy an REO as is always give the bank another opportunity to make repairs or give you a credit after you have completed your inspections because sometimes the bank will re-negotiate to save the transaction instead of putting the property back on the market, but do not take it for granted. 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). The last downturn in the real estate market created many millionaires who were able to buy and hold cash flow positive REO properties. Many novice investors make offers that get accepted by the bank but they rescind their offer when they realize that they did not do enough homework on the property and major repairs are needed. Buying cheap cash flow REO's in bad areas will mean lower rents, higher tenant turn over and increased property management hassles for the hold investor. A copy of a check for one thousand dollars is usually submitted as a deposit with most REO offers. The offer typically states that the check will be placed into escrow within 48 hours of acceptance. Many of the poor condition and damage issues associated with REO homes is due to the homeower taking out their anger on the property. REO investors must visually inspect houses for the structural integrity of major components such as the foundation, roof, walls, plumbing and electrical. The bank will not take responsibility for the investors mistakes. Giving the current state of our economy, factoring a decline in rents over the next few years is a good idea when calculating cash flow. HomePath Mortgage Financing is available on Fannie Mae homes and a down payment of 3 percent can be funded by your own savings, a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer. REO buyers should be aware of the following basic FHA loan qualification guideline: Your new mortgage payment should be approximately 30% of your gross (before taxes) income. Remember that these guidelines are subject to change at anytime and you should stay abreast of current loan programs. If you cannot close an REO by the predetermined closing date, the bank may charge you a penalty for each day you pass that date. FHA requires satisfaction of appraisal conditions prior to closing. Yet, REO banks typically will not authorize repairs prior to closing. Then, toss into the mix that bank repo buyers rarely want to pay for repairs before they own the home. You should check market prices for homes in your region and calculate the cost and repair time, before deciding that an REO property is a good deal. Ask a group of real estate millionaires how they made their money and most will recite some version of this axiom When everyone zigs, you zag. In today’s downward real estate market the axiom simply translates into buying property when most others are not and that’s exactly what REO buyers in Southern California are doing. 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..when inspecting an REO take the time to look over the back walls. There can be some surprises such as mobile home park, apartment buildings, or busy street that could have an adverse effect on value. REO Part II: Banks have departments that must maintain these homes, keep the lights on and keep the taxes paid. 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. Savings of 20% to 30% off the fair market value are absolutely possible, making an REO purchase the best way to buy a property for the first time home buyer or property investor. They give prospective buyers immediate access to the property for inspection. They remove all liens and back taxes. They allow negotiation on all rehab costs, interest, closing points and loan amounts. The purchase is described as 100% risk free and they may allow a less than normal down payment. The bank will also evict the tenants if necessary. So you can see the benefits of of buying REO properties. In today's housing market the glut of foreclosures has created a rare investment opportunity for those who know what they are doing. |
