Mathews Associates

"Building Lifestyles for Life"

BANK OWNED (REO) PROPERTIES!

Posted by Dwight Mathews on February 17, 2010

Major subregions of the Inland Empire.
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ARE THEY REALLY GOOD DEALS?

With so many foreclosures still on the rise and a shadow inventory in the millions of dollars, still sitting on the books at a Bank near you.  You would think that the banks would be eager to negotiate with a buyer who’s ready, willing and able to take that property off their hands at a great price.

But can you really negotiate an exceptional deal?

Maybe!  If it’s in a bad part of town and needs some serious rehabbing.  The misconception that most buyers and investors have is that the Banks just want to get rid of all those properties at low ball prices as quickly as possible.  The reality is however, most of those homes are being sold at or near market value.  Some are even getting multiple offers over and above listing price.  That’s not to say, of course, that there aren’t a few good bargains out there if you look hard enough-and wait long enough.

Buying REO properties are almost always sold ‘AS-IS”!

Foreclosures owned by banks are usually clear of any liens that may have been recorded against the property. However, anyone considering buying a REO property must make sure that they have the property inspected thoroughly by a professional home inspector because, banks aren’t bound by the same disclosure laws as typical sellers.  The most important thing to remember is that most banks through a listing broker will pay the broker to make repairs etc, prior to the  sell.  The problem is;  The contractors hired by the broker, have no duty to disclose damages that they fixed or painted over to hide any defects.  Everything done (quickly), for the most part is strictly cosmetic.  If it looks good-It will sell!

Unfortunately, for the buyer, many undisclosed damages are overlooked.  I’ve seen wood rot termite damage, cracked foundations.  Bad electrical repair.  The list goes on.  What was once looked at as a so-called good deal, turns into a nightmare in some cases.   Hiring a professional home inspector along with a Exclusive Buyer Agent, as well as, talking with the neighbors about the property you may want to buy, can eliminate most surprises.

Your decision- Is it a Good Deal or Not?

All and all, bank owned REO properties are for the most part, not really good deals at all.   Even if you think that it may be a good purchase price, by the time you add up all of the costs involved in rehabbing the property, you will almost always find that you paid too much.  Regrets after the fact aren’t a good thing.  Those costs need to be estimated and calculated long before any offer is made.   As any Investor will tell you;  Without  Research and thorough due diligence, one cannot expect to make a smart and sound financial decision.   Especially, in today’s market!  If it doesn’t compute financially and economically.  Find another property that will!!!!!

If you would like to find out more about REO foreclosures or any other distressed property sales in the Inland Empire, here in Southern Ca. please email me or call my office for a private one on one consultation and personal profile valuation.  You can also call me with your personal information and I will add your name to my VIP Buyers list. “Hire One For Your side”

Mathews Realty Associates, 909.790.8196



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