What is a bank owned home and REO?
A bank owned home generally comes about because the buyer no longer made their mortgage payments and the bank foreclosed on the property. The bank does not want to keep the property and buyers can often take advantage of this situation and find deals if they have a system in place. That system is what I offer my buyers! An REO means "Real Estate Owned" and is the same thing as bank owned...I work with Sacramento, Arden Park, Arden Arcade, Arden Manor, Garden of the Gods, Greenhaven, Rancho Cordova, Elk Grove, Folsom, Cameron Park, Roseville and all the way up to Pollock Pines foreclosures...Basically, all Sacramento, El Dorado and Placer Counties!
Things to think about regarding buying REO's or Bank Owned homes:
1. It is very important to have an approval for a loan in place before even thinking about writing an offer. Most banks won't even look at your offer without that. If it is an all cash offer, then have a bank statement ready.
2. Often the selling bank will want you to be pre-approved through their bank. However, if you are working with a lender you should have an agreement in place that should you write an offer, you may request your lender to forward your approval information to the bank for you. I help you arrange this ahead of time for you! You can usually stick with your lender but the selling bank may want to see your approval information.
3. You need to work with an agent who can get you into the new REO listings fast and set up a system with you so an offer can be written fast. If it is a good deal, it is not uncommon for that listing to have several offers and many paying cash!
4. Once you have an accepted offer, getting a home inspection is a must because there are no sellers available to give you disclosures on what they know about the house.
The difference between short sales and bank owned
A home that is listed as a short sale is basically on the path to forclosure foreclosure. The owner is generally no longer making payments but is trying to sell the house for less than they owe. The bank would have to agree to this, of course. The motivation for the seller is if the bank agrees to a short sale, the seller's credit may not be hurt as bad had they forcosed. The modivation for the bank short selling is sometimes they can make more money for their investors rather than going through foreclosure.
A foreclosure is what happens if a short sale does not go through or if the owners don't even try to short sale but walk away from the deal all together. The bank has to sell it and that is an REO or bank owned property!
How I can help
I set up a system with my buyers to be sure they know what bank owned homes are available now and that list is updated daily. The system also includes my method of being able to get my buyers into the house fast to see it and then a method to get the offer submitted as fast as possible while protecting my client's interest. There is a lot to know about bank owned homes and I spend the time educating my buyers.