Making Money On REO's In PSL

Looking for Bank Owned Property?

REO's, what are they? REO's are homes that have gone through the foreclosure process and now belong to the bank. These homes should not be confused with the properties being sold at the courthouse foreclosure sale.

When you buy at the courthouse steps you assume lots of liabilities attached to the property. Also in Florida you have to put down a percentage at the conclusion of the sale and pay the balance within one day. When you buy at auction you are agreeing to take the property AS-IS with all the title defects and maybe even an occupant that you will need to throw out. REO's tend to be much cleaner transactions.

Because the REO did not sell at the foreclosure auction, the bank is now responsible to clean up the title, remove any occupants and generally have the house ready for sale. You do need to know that REO fixer uppers usually are exempt from many of the disclosure requirements of a normal real estate transaction. Because you do not close immediately you do have time to get a full property inspection.

REO's Bargains Or Not?

There is a common misunderstanding that just because REO's are bank owned they must be a bargain. Many Times REO handyman special houses may not be such great deals. If you intention is to make money on the property you need to be very careful. The bank is still going to try to maximize the selling price even though they may be anxious to move the property. To be a success with REO investing you need to stay current on the local comps and what you can sell the property for. In addition you have to know what it is going to cost you to make the property saleable. If you buy your REO at the right price the chances are much better that it will be profitable for you. If you are unsure of yourself in these areas it may be better that you joint venture with an experienced investor.

Time To Make An Offer?

Most banks have REO offices but generally they will list the property for sale with REO real estate agents who will place the property in the MLS. Offers are submitted through the listing agent and then forwarded to the bank where it is handled by the REO department. Many times, the bank will list the property artificially low to get a "auction" situation going and this will cause multiple bids on the property. These multiple bid situations often result in a much higher sale price for the bank.

A word of warning, if you do not have a large tolerance for frustration you may not want to buy REO property from a bank. It is not uncommon to have a great deal of difficulty working with the bank and deals do have a way of often falling apart. If you are not ready for the frustration of working with the bank you might look for a wholesaler that has already secured bank owned property and is reselling cheaply. The wholesale route will facilitate you purchase and you will avoid much of the hassles of dealing with the bank. So if you desire a bank owned home there are lots of ways for you to get it.

Article Source: http://www.mycontentbuilder.com

{AuthorName} is one of the largest wholesalers of REO properties in the Martin, St. Lucie Or Palm Beach County areas of Florida. You should check out his web site called www.REOsCheap.com. All though he works primarily with cash investors he can provide a good referral for anyone wanting a fixer upper for themselves to live in.

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