Real Estate

 

REO For Sale – Use This Explosive
Overlooked Strategy To Land
An Incredible REO Deal!

If you are looking to buy home or invest in real estate, you need to know about the power of REO for Sale properties.

If you play your cards right, by using this tactic I’m about to share, you can end up purchasing a property at fifty cents on the dollar or better!

REO is the acronym for Real Estate Owned and it defines or indicates that a bank has taken ownership of a property through foreclosure.

The property is then placed in the Bank Owned REO department.

In a bustling economy, the Bank Owned REO department rules! They can sit on a property or properties until the cows come home when it’s a seller’s market and they know this. I’ve been in a seller’s market in which the banks receive so many offers; they take a haughty attitude towards those who don’t overbid. But I’ve also been in markets like the one we are currently in, in which managers of bank REO properties do some of everything to draw buyers; pray, chant, cross their fingers and hope, you name it!

As you know, we are in an economic tsunami of sorts and managers and department heads of REO for sale departments are reeling from having such huge inventories. If I were talking to you face to face, I would be shouting that last statement at the top of my lungs to make sure that you heard me. How bad has things gotten for the banks and their REO for Sale Departments?

Things have gotten so bad that many bankers are strategically delaying REO properties for sale to avoid paying the maintenance, fees, and taxes. When a lender forecloses on a home, they become responsible for paying the taxes, maintenance and any fees such as the HOA Home Owner Association Fees, until that home is sold.

I recently tracked a REO for Sale property in Smyrna, Georgia in which the owners decided their best option was to walk away. They received a foreclosure notice from their lender and the date of the Sheriff’s Sale and they simply moved out. They called their insurance company and cancelled their homeowner’s insurance. They called the alarm company and cancelled the monitoring service and they cancelled the lawn service. When the Bank REO department took the property over, here’s what they were forced to pay on a monthly basis…

  • Homeowner’s insurance $80.00
  • Lawn service $120.00
  • Taxes $235.00
  • Property Monitoring $65.00
  • HOA $75.00

Did you do the math? That comes to $575.00 per month! Now multiply that figure times one hundred and twenty properties. That means that a REO for Sale Department could potentially be doling out close to $70,000.00 Seventy Thousand dollars a month in a depressed market. If you don’t believe they have a motivation to move propertied out of their REO for Sale department, think again!

How do you use this information to land an incredible deal or deals? First do your homework; whether you are working from REO listings or foreclosure listings, you need to do a cost analysis. This will help you determine how much the bank is paying on a monthly basis. Secondly, you need to get a rough estimate of how many REO for Sale properties that bank has.

There’s a number of ways to quickly grab this info. Some banks and lenders have websites specifically designated for their REO properties. Others, you can find this info on various REO listings and foreclosure listings. Another option is to simply ask the REO Dept manager. Let him or her know that you are an investor who buys in bulk and ask them how many properties they have available.

Thirdly, find out how long the bank has had the property in the REO for Sale department. A simple check online and you can learn the foreclosure date. Finally, know your market! How long are properties sitting in your area? Is the bank that you’re dealing with on the FDIC watch list? How is the stock of the bank rated, Buy, Hold or Sell?

When you check the market, what are they saying about this bank? Armed with this information, you now know what the market will bear! I’m seeing people buy REO for Sale homes at twenty-eight cents on the dollar, all because they did their homework and got aggressive with their offers!

Source: Harold Becker, REODr.com

 


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