REO FAQ

by Lance Kettler

Do you have questions about purchasing REO property?  This is a great forum to ask your questions and get answers.  In the meantime I thought I would answer some of the more common questions I get about purchasing REO property.

Aren’t REO properties horrible burned out buildings that they couldn’t even sell at auction?

No.  It is a common misconception that all REO properties are in horrible inhabitable shape.  In today’s market it is estimated that more than half of all properties in foreclosure will become REO property.  Some of those properties will be in rough shape, some will have moderate damage and some will be in relatively great shape with minimal issues similar to typical homes on the market.

If the property does need repairs, doesn’t it just become a cash upfront nightmare for the buyer?

No.  In today’s market banks and lenders are motivated to sell their REO properties.  In some cases they are offering allowances and incentives to take care of the repairs.   In other cases the banks are completing the repairs before offering the home in order to move the home quickly. Additionally, if you qualify, there are some loans available that allow a purchaser of an REO to wrap the costs of the repairs into the home mortgage.

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