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Archive for April, 2008

Would you buy a home blindfolded?  Believe it or not, there are people who do it everyday.  When you buy a home at a foreclosure auction it’s not unusual to do so without having an opportunity to inspect it. 

Now, I like to consider myself a bit of a thrill seeker and I enjoy playing poker as much as the next person.  But gambling on a home purchase really isn’t for me, I prefer to look at a home before I purchase it. Call me crazy, but it’s my preference.  It’s one of the many things I really appreciate about REO property. 

With an REO you get the benefit of great savings, but you also get to inspect the property at length, on your time schedule.  And because REO’s are sold by the bank/lender that owns them, they use traditional loans and lending methods – none of the complicated auction, “cash only” mumbo jumbo.  When purchasing an REO it’s remarkably similar to purchasing a home in the traditional way. 

If you prefer the hear pounding adrenalin of the auction gavel and the excitement of not really knowing what you just spent hundreds of thousands of hard earned dollars on – by all means, buy foreclosure at auction.  If you are just interested in saving a substantial amount of money on your next home purchase, but aren’t’ interested in the element of surprise, call me and let’s talk REO.

Don’t forget to subscribe to the blog, you won’t want to miss my next installment when I talk about fixer uppers!

The advice and tips offered in this blog are intended to be solely informational and do not apply in all circumstances.  Make sure that you consult a real estate professional, financial consultant or accountant before taking any action.  For further information or questions please contact Gabriella@IARNY.com

 

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How long would it take you to save $100,000? Could you do it in a year? A month? A week?  If you purchase an REO you could save $100,000 in a single purchase.  Seems like a smart investment choice to me. In the last blog I talked about the fact that REO properties are owned by the bank or lender, and they are often a better buy than buying foreclosure property at auction.

Today I want to talk about silent seconds.  These are the loans that became very popular in the last 15 or so years.  It used to be that if you wanted to buy a house you had to be able to make a down payment of 20% of the purchase price.  But as home prices began to soar more and more families found it impossible to come up with that large of a lump sum.  So the industry began to offer an alternative.  You could take out a loan for 80% of the purchase price and then take out a second loan for the remaining 20%, which is called a silent second. 

In the case of some REO properties the silent second is forgiven and the bank/lender will offer the property for their investment, which was 80% of the home value.  That 20% savings becomes profit in the savvy investor’s pocket.  To put numbers to this illustration: If the home were valued at $500,000 the savings would be $100,000. 

I go back to my original question, “How long would it take you to save a $100,000?”  Isn’t it time you considered buying an REO?  Give me a call and I’ll show you what is possible.

And don’t forget to subscribe to the blog; I’ll have more REO saving tips in the next installment.

The advice and tips offered in this blog are intended to be solely informational and do not apply in all circumstances.  Make sure that you consult a real estate professional, financial consultant or accountant before taking any action.  For further information or questions please contact Gabriella@IARNY.com

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Someone recently suggested that I write and article entitled “REO for Dummies”, patterned after the popular “Dummy” book series.  I understand the concept, simplifying things so that absolutely anyone can understand the information, but I can’t bring myself to pair REO and dummy in the title.  Purchasing REO properties is for people who want to make a smart choice. They don’t have to be “smart” about the market, that’s what I’m here for.  They just need to understand the basics of what REO properties are and why they are capable of being a great deal, especially in today’s market.

 

So, class is in session!  Let’s talk REO basics for smart investors. First, REO stands for Real Estate Owned, it means that the property is now owned by the lender.  A property does not become an REO overnight.  First it goes through all of the steps of a foreclosure, including an auction. If the property does not sell at auction it reverts to the bank or lender.  It then becomes their right to sell the property in order to retrieve their original investment.

 

You might be thinking, “Wow, if it didn’t sell at auction then it probably isn’t worth purchasing.”  You might be right, but it’s worth further investigation.  Sometimes a foreclosed property won’t sell at auction because there are disadvantages to purchasing it at auction. Once the property becomes as REO the lender becomes a motivated seller and will frequently offer incentives, concessions or allowances to qualified buyers in order to make the property more attractive.  This is just one of the ways that a REO property can be more advantageous than buying at auction.

 

Check back for my next installment when I share more information about why you should seriously be looking at purchasing REO property.  You can subscribe to the blog by clicking on the RSS button.  You won’t want to miss this information.

 

The advice and tips offered in this blog are intended to be solely informational and do not apply in all circumstances.  Make sure that you consult a real estate professional, financial consultant, attorney or accountant before taking any action.  For further information or questions please contact Gabriella@IARNY.com

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