When considering purchasing a Real Estate Owned (REO) home, there are a number of key things to keep in mind. First of all, REO sales are not the same as foreclosure sales, though some can confuse the two. There are many Scottsdale foreclosures available, but Scottsdale REO homes are slightly different. A foreclosed home will be auctioned off, with bids starting at the amount required to cover the remaining mortgage and any other costs. If the foreclosure does not sell, it becomes an REO home and is owned by the bank that held the original mortgage. At this point, the mortgage is done away with.
Many think that since the prices of Scottsdale REO homes can be significantly lower than those of other homes, they are great deals. However, many of these homes require some measure of maintenance. Because banks do not pay for repairs or cleaning and sell the properties “as-is,” it is important to understand the additional costs that may be required after purchasing an REO home and factoring those in when making an offer.
It may also take longer to hear back from a bank than from an individual seller when negotiating a price. With Scottsdale REO homes, prices have to go through a number of approvals. This may take some time, so patience is key. It is also wise to request inspection reports and repair allowances. This can save you time and money in the future, and although banks will often refuse to cover repair costs, it never hurts to ask. The most important thing you can do when considering an REO purchase is to utilize an experienced Realtor. The right Realtor can help you make informed decisions and negotiate the best deal for you.
Carmen Brodeur JD
Trillium Properties, LLC
9825 E Bell Road, Suite 120, Scottsdale AZ 85260