This week I worked with an agent in my office that sells REO homes and a selling agent who did not understand the difference.. So lets answer a few questions right off the bat.
- What does REO stand for: Real Estate Owned, or more commonly referred to as Bank Owned Property
- Who Technically Owns the Home: The Bank or Lein Holder who foreclosed on the property
- Does it forever to buy: Nope! In fact it can be faster then a private sale because no one is currently living in the home
- Can I get a super deal on a REO: Sometimes, although the general misconception is because the property is distressed that a buyer can offer super low and the bank will take it. Typically this isn't the case
This type of sale allows any Licensed Real Estate Broker to sell the home, no special certifications needed. However, the process on submitting the offer is completely different then a typical sale with a private party. This is why its especially important to choose an agent who has experience working with REO's!
Here are a few of the differences:
- When offering you cannot rush a bank to make a decision. In a hot market it can sometimes be wise to demand a fast answer to your offer in order to beat out any competitors. A bank will not be rushed
- Be Patient! A bank will choose the offer solely on the best terms. Financing type (including cash) does not typically make a difference at all. Put your best foot forward and hope for the best.
- Verbal Agreement?! Yes, although Washington State Real Estate Law does not hold any verbal agreement to be acceptable, the REO company will still give you a verbal acceptance before sending the signed contract.
- Inspection is for your knowledge only.. The REO company usually does what they are planning on fixing addressing prior to listing. It is still very important to do your structural and pest inspection, but know its for your knowledge only.
A REO home can provide instant sweat equity and a great investment, but its not like you see on your HGTV show. You need an experienced professional to guide you thru the process and advise you.
Contact Matthew Voss for more questions or if you would like a current list of REO properties in your area!