Foreclosures - Buy or Run Away?
Foreclosure or REO (Real Estate Owned) property is owned by the bank or lender of the property because the home owner defaulted on their loan. From the time a home owner goes into default and when that property is listed for sale to the general public could take many months or go quickly, much depends on the cooperation the bank has with the home owner. I've had a foreclosure property be listed for sale within 2 weeks of the the foreclosure sale date and one I just closed in South Austin took over well over a year. Putting that aside - once a foreclosure is listed on the market for sale the process is very similar as a tradition re-sale listings. An offer is made, negotiations commence, once price and terms are agreed upon, everyone signs, earnest money is deposited, inspections occur and assuming all is well the property closes between 2-4 weeks depending if the buyer is paying cash or financing. Pretty simple. The primary difference between banks and home owners are banks are 100% number oriented and make decisions based on what's going to get them the Highest Net & Quickest Close? They are not emotionally tied to the property and will not accept offers that don't fit into their "box". They will many times hold a property for months at at time until they get what they want. Secondly, the purchase is AS IS, literally. Buyers can do inspections but the bank 98% of the time will not do any repairs and rarely make any concessions once the original price and terms has been agreed upon. There are always exceptions but for the most the transactions are simple, straight forward and as long as the buyer understands the process upfront it can go smoothly. #foreclosure #distressedproperty #gooddeal #REO