Bank-Owned Real Estate

Posted by Jace

October 23, 2008

Real estate becomes bank-owned after no one bids on it at the foreclosure auction. This is usually because the starting bid is too near, or even above market value.

After the bank puts in their “credit bid,” they become the owners of the real estate and the REO department gets it ready to sell. They hire a real estate broker to list the property and generally, little or no repairs are made. They determine the asking price based on appraisals and BPO’s (broker price opinions).

There are many bank-owned homes in the Boise, Meridian, and Eagle ID area. You can request bank-owned real estate here. Bank-owned properties are generally priced to sell and can be a very good opportunity to get a deal.

Six things to know if you’re thinking about buying bank-owned real estate-

Many banks do not allow the listing agent to advertise that it is REO. As a result, make sure you have an agent who knows how to locate these properties so you’re not missing out on the best home or best deal.
Banks usually stay firm on the asking price but typically will not object to paying closing costs.
While each bank is different, most reassess the asking price every 4 weeks by an appraisal or BPO and systematically lower the price until they get a buyer at or near that number.
Properties are sold “as is”. You can have language in your contract for an inspection and it can be a contingency to the sale, but they are selling it “as is.” No repairs or warranties are made.
Make sure you have an extremely good home inspector. Homes may have sat through the winter without proper winterizing and you want to make sure you uncover any potential problems.
Because bank-owned real estate is usually a great deal, there’s a lot of competition looking at these properties. You need to have a system to be aware of these properties as they come on the market or one of them lowers their price. For bank-owned homes the Boise, Eagle, Meridian, Kuna, or Star ID area, you can sign up for my email alerts so you don’t miss the best opportunities.

If you have further questions about REO’s don’t hesitate to let me know.

Jace Stolfo
208-484-2560
Email Me

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