REO’s are hot! There are over 1 million homes going into foreclosure a year and are reverting back into bank’s inventory
as the bank’s real estate owned homes. There are home literally selling for half of the tax assessed values. The rich are getting richer right as “the time to buy is when there’s blood in the streets.” You will know immediately if a home has been repossessed if you see bank signs all across the windows of homes or signs in the yard that say “real estate owned” or “bank owned” or “corporate owned.” This means the bank is the legal owner of the home and they need to dump the home fast to get money so they can go make a loan to someone else. Remember, the bank is not in the business of buying and selling homes. They are in the business of making loans.
Owning a home is the biggest investment you can make. And if you buy a bank repossessed home you need to make sure you know what you are doing because there are many traps you can fall into. At Florida Capital Realty, the founders were the REO BROTHERS ™ Aram Shah & Tim Shah, who wrote the book on the subject called REO Boom: How to Manage, List, and Cash in on Bank-Owned Properties: An Insiders’ Guide for Real Estate Agents
They have identified five friendly tips when looking to buy an REO:
- Work with an REO listing agent
- Pre-approval letter or proof of funds will be necessary when placing offers on REOs
- There will be multiple offers on REOs
- The real jewels are REO properties that are not on the market yet; they are sitting in inventory with the real estate brokerage company
- REOs can build fast equity
REOs are a completely different animal. First thing you must do is contact Florida Capital Realty and ask for a seasoned REO agent. In the REO business there are two types of agents. First, is the “listing agent” who lists the home for sale for the bank. The second, is the “selling agent” who finds buyers and tries to place them in homes. Usually, the one’s with the expertise is the listing agent because they have the first hand knolwedge of hot deals before they hit the marketplace.
Think about it. When a property reverts back to the bank some of them have damage inside and some of them actually have people living in them. This all equals time. Time to fix up the place, and time to find the occupants alternative living. This is the job of the listing agent to oversee this process. Therefore, before an REO hits the market the listing agent can know about a particular situation months in advance.
Another tip is have your paperwork ready. You need your pre-approval letter from the bank or your proof of funds (e.g. last months bank statement) in order for a bank to take you seriously. At Florida Capital Realty, our REO agents already have mortgage professionals that are on standby to help you get a pre-approval letter. Because, there is so much demand for REOs, there will be multiple offers on a property. You will be competing with 5 or 6 other home buyers and you must have someone seasoned like a Florida Capital Realty agent on your side. Last thing you want is your offer to be rejected and then a subsequent email stating the home is sold to another home buyer.
Next, you must get an opportunity to view the REOs before the competition. This only works if you are working directly with a direct listing agent, like all of our agents at Florida Capital Realty. We get properties in our inventory months in advance so we can match specific homes to your needs early. These represent the true “diamonds in the rough.”
Finally, the best thing about REOs is if you manage to successfully buy one (i.e. you must use an seasoned direct Florida Capital Realty listing agent) then you can build lightning fast equity in your home. Because the home is priced at such an incredible deep discount, within a couple of years you can have a nice cushion of equity to use for a rainy day.
Therefore, if you are ready to purchase an REO today, contact Florida Capital Realty so we can get started with finding you the perfect dream home: 888-846-4846
Follow Florida Capital Realty