Buying Bank Owned Real Estate | Experience Southern Utah

Buying Bank Owned

Shopping For REO Properties in Saint George, Utah

It's sort of myth that you see on the late-night infomercials concerning real estate and the promise of "You can buy this beautiful home for as little as one dollar!" Granted, not all the claims are this ridiculous, but you get the point.

A property owned by a bank is known as an REO, or Real Estate Owned. In Saint George, Utah there are plenty of these to choose from at any given time. Not all of these properties are worth the bank's asking price, but there are plenty of lucky shoppers who have done their homework and their Due Diligence by having the property inspected, and ended up with a great bargain. Following are some quick and simple things about buying an REO:

1.	As the owner of the property, the bank will pay off all liens against it. There is no longer a mortgage against the property, either.
2.	Don't get caught in a 'bidding war' on the property, because you may lose – badly.
3.	Always conduct an inspection before buying an REO.
4.	Your offer will undoubtedly be countered by the bank. Knowing this, be prepared to counter their counter; don't give up yet. The bank needs to demonstrate to their investors that they tried to get as much money for the property as possible.
5.	Ask for the bank to make repairs that are reasonable. Also, ask for a few dollars in closing costs but don't count on a "yes". You're just using it as a negotiating tool.
6.	You must have a pre-approval or, better, a pre-qualification letter from the lender you will be using for the purchase.
7.	Ask questions of your Realtor before you buy: Are there any inspection reports available to see? Has the bank agreed to do any of the repairs already? Do I have to sign an 'as is' addendum? What kind of time should I give the bank to respond to my offer?
8.	While you are waiting for a response, have your Realtor show other properties to you, because it could take some time for the bank to make up their mind.
9.	If it doesn't feel right, don't buy it.
10.	If it does feel right, pursue it carefully and then buy it.