As Denver residents know all too well, the Mile High City is experiencing growth and expansion like we’ve never seen before. If you’re considering jumping into homeownership, according to
Considerations For Buying An REO
Step 1 – Secure Financing
Just like purchasing a traditional property, rule number one to purchasing an REO property is the same: get pre-approved! There’s nothing worse than falling in love with a property and not being able to afford it, and that goes for REO properties too. If you don’t know what you can afford, you’re setting yourself up for disappointment. In addition to pre-approval, it’s also a smart idea to have enough budgeted for a down payment, closing costs and potential renovation and repairs. Since many REO homes are sold as-is, you’ll need to be prepared for additional costs after the sale.
Step 2 – Be Prepared to Make an Offer
If you see an REO home that you'd like to buy, the sooner you can make the offer the better. Why the rush? It’s possible you’ll be competing against investors and other interested parties who are also able to move fast, often with cash offers.
Step 3 – Due Diligence is Your Responsibility
Since REO homes are sold as-is, it’s really important to do your homework once you've signed the contract. This starts with the home inspection. You’ve probably heard it’s always a good idea to get an inspection when you're buying any home – it’s even more important when you’re buying an REO. Since the property may have sat vacant for some time, it’s crucial to have a reputable professional inspecting every nook and cranny. This is also the right time to ensure the REO is free of any safety hazards or other unknown issues.
REO properties can vary greatly. Some are in great condition and need minimal work, and then there are some in need more extensive improvements. Still, depending on your budget, timeline and overall goals for purchasing property, an REO may be just what you’re looking for.
Ken Blevins, Chief Executive Officer of Metrowest Real Estate Services, is a veteran in mortgage and default servicing with more than 23 years of experience in collections, foreclosure/bankruptcy, los....
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