The Five Keys to Purchasing Bank Owned Properties

The Five Keys to Purchasing Bank Owned Properties

Right now is one of the best opportunities in decades to invest real estate. Interest rates are at some of the lowest we have seen in our history. There is a large selection of available inventory, housing prices are at 7 or 8 year lows and banks are very motivated to sell off their REO properties. Listed below are the 5 key points to purchasing bank owned properties.

1. Get pre-approved for a home loan with a direct lender to determine the maximum purchase amount the bank will lend you. This is essential prior to any offer being submitted.

2. Request a free foreclosure list from a real estate agent or REO Broker.

3. Drive by your desired listings and choose the properties you would like to preview and/or get additional information on.

4. Call a real estate agent or REO Broker to schedule an appointment to preview your preferred properties and receive specific details on how to make an offer. Have your agent or broker run comparables on the area to determine a fair market price.

5. Ask your agent or broker to write a through offer, complete with a pre-approval letter, credit scores (FICO), earnest money deposit and submit the offer to the REO listing agent and bank.

The banks main consideration when accepting an offer is their bottom line from the sale and how quickly the property closes escrow.

Rich Nichols, Reo Broker Assoc.
Website: http://www.richnicholshomes.com/

Government Moratorium on Foreclosed Properties

Have you recently noticed there are a limited number of listings for REO (Real Estate Owned) properties? There is a logical explanation for this housing situation. Since November 2008 the US government has been designing a housing bill. During this process they have placed a moratorium on many financial institutions and government agencies, such as Fannie Mae and Freddie Mac (companies that would benefit from this bill) from introducing any new REO listings in to the market place.

There are currently thousands of properties in inventory waiting to be released for sale. These properties will become available as soon as the housing bill has been passed by the House and the Senate and signed in to law by President Obama.

In the interim Fannie Mae has introduced a new REO loan program thru their HomePath, designed to assist homebuyers who would like to purchase Fannie Mae properties.

The key benefits of the HomePath Mortgage Loan:

· Only 3% down required on primary residences.
· Only 10% down on 1-2 unit investment properties.
· No mortgage insurance required (PMI).
· No property appraisal required.
· Get up to 6% in seller concessions on primary residence properties.

To qualify you must have a completed loan package:

1. Pre-approval letter from a verifiable direct lender.
2. Credit score (FICO).
3. Proof of income.
4. Proof of funds.
5. Employment verification.