Time To Get In On The Bulk REO Explosion!
Question that often pops up is – why go for Bank Owned REO properties instead for short sales? It really all comes down to which method brings you more money, at lower risk, faster. With current market conditions real estate investing is hard enough. Now more than ever, it is time to go with strategy that guarantees success.
Comparing short sales with Bank Owned REO properties is really comparing pears with apples. The script is the same. The differences are in lender’s legal ownership of the property, sale conditions and consequently the sale price.
It is a familiar story. Homeowner is behind on their payments and the property is heading toward foreclosure. And it goes two separate ways from there.
The bank’s motivation is to sell properties fast. While bank will not go unreasonably low, the highest price will still be well under the short sale price. And auction style sales means you will know where you stand in short order.
Short sale is sale of distressed property before it hits auction. The property is owned and sold by the homeowner. Bank or mortgage lender agrees to discount a loan balance on the property, the owner sells it for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender. Consequently, homeowner will try to get as much as he can out of the sour deal and hike up the price.
The homes purchased are as is, and chances of having homeowners do repairs are slim to none. Can you blame them? In short sales, the homeowner’s motivation is money. And 100% of the time they will go for the highest offer. Similarly they will wait to make the sale to make sure they receive the highest offer. You may spend good time waiting and never hear back from the seller. Waste of time and money, wouldn’t you agree?
In bank owned REO’s, the bank owns and sells the property. Bank owned REO property has been acquired by the lender through a foreclosure action. Banks really do not care for keeping the property. For them property means maintenance. And maintenance means loss of money. This is why banks will let the bulk REO properties go for much less than the loan balance. In fact, banks is so willing to get rid of REO properties that it is possible to make an offer contingent upon an inspection to see if any major repair work is needed. And with the owner out of the picture buying Bulk Bank Owned REO means no haggling, great price and in short - a sweet deal.
The bank’s motivation is to sell properties fast. While bank will not go unreasonably low, the highest price will still be well under the short sale price. And auction style sales means you will know where you stand in short order.
As a serious real estate investor you have to ask yourself a question:
- What is your goal? Serious money or counting pennies?
- Are you willing to wait and risk ending up with a zero?
- Or - would you rather swoop in and score a handful of properties for a great price at …say…..50% off?
I think the answer is clear. To make good money - you must act fast. See the deal, grab the deal and run with it. Otherwise you will be left out in the cold.
REal More on my Wordpress Blog Here http://ultimatebulkreo.com
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