Real estate investors and homebuyers alike can take advantage of several benefits when buying a bank owned property. The market for bank owned properties in Florida continues to expand and can be a favorable investment for any type of buyer, and the CHIODO team is ready to assist with the purchase process. Bank owned properties, otherwise known as Real Estate Owned (REO) properties, are a type of real estate that goes back to the mortgage company after foreclosure.
During an economic downturn, the number of foreclosure properties in a given market are usually on the rise, which means you can find a great bargain. Here’s a close look at why buying a bank owned property could be in your favor, and ways in which the purchase process is different than a standard purchase.
Basics of Buying Bank Owned Properties
When a homebuyer or real estate investor is planning to purchase a property, they typically turn to a real estate agent to search through MLS listings in the area they are interested in. However, properties that are in foreclosure or real estate owned are typically not included in this search. If you’re looking for a bargain or want to explore options beyond the MLS listings, you will need to work with an REO specialist to guide you through the process. The CHIODO team specializes in REO properties and we’re here to work with your best interests in mind.
Simply put, a Real Estate Owned property is one that has been foreclosed by a bank or loan company, which means the lender now owns it. Under the terms of the foreclosure, the bank or loan provider has full rights to sell the property, even if the tenants haven’t moved out yet. Every bank or lender works slightly differently, but the primary goal is to get the best price possible for the property. As a buyer, you have the opportunity to make an offer to purchase and are permitted to counter any counter-offers.
One of the most significant differences between buying a bank owned property and one that has been listed on the MLS is that the bank will sell the property “as is”. This means that you will be responsible for scheduling all inspections and most of the repairs.
Benefits of Buying Bank Owned Properties
There are several benefits of buying bank owned properties in Florida. These include:
- Attractive price
- Very willing seller that is ready to negotiate
- Attractive lending rates from banks that offer financing for REO properties
- Good investment opportunity when real estate prices dip
- Tax advantages
Ultimately, most REO properties are discounted homes. You can find a bigger home with more features in a great area for a lower-than-average price.
Getting Started with the Bank Owned Property Purchase Process
When you are ready to purchase a bank owned property in Florida, the CHIODO team is here to guide you through the entire process. Our experienced team will help you navigate through all the important aspects of the transaction and provide you with objective answers to all your questions about the REO purchase. We understand how frustrating and complicated the REO process can be, which is why our agents take the extra time to assist you at each step. We’ll help you work through all of the following key steps of the REO purchase process:
- Inspecting the property – the majority of REOs are listed as “distressed” properties and sold “as is.” You may be looking at a property that needs a lot of repairs and renovations, so working with a licensed home inspector can give you an accurate idea on what to expect.
- Performing a title search – you will need to search public records for liens and any outstanding taxes that may need to be paid on the property.
- Negotiating with the lender – since you are working directly with the lender or bank that owns the property, you can negotiate on closing costs, a lower interest rate and even a lower down payment.
- Making the offer – since you’re working with an eager seller, you may be able to negotiate for more attractive price.
- Securing financing – most banks will provide loans for the full foreclosure or more.
Contact us today to set up an appointment for more information about REO properties and guidance about buying bank owned properties.
