rightBuying bank owned properties in Warner Robins GA
There is a lot of interest in buying bank owned properties these days. A lot of information, some good and some bad, is floating around about the subject.   Often the information offered is for sale, with the promise that you can make a lot of money with little effort once you know “the secret formula”.  The fact is that there are no secrets, and to make money does require effort.

What’s an REO?left
REO stands for “Real Estate Owned”.  These are properties that have gone through foreclosure and are now owned by the bank or mortgage company.  This is not the same as a property up for foreclosure auction.  When buying a property during a foreclosure sale, you must pay at least the loan balance plus any interest and other fees accumulated during the foreclosure process.  You must also be prepared to pay with cash in hand.  And on top of all that, you’ll receive the property 100% “as is”.  That could include existing liens and even current occupants that need to be evicted.  A REO, by contrast, is a much “cleaner” and attractive transaction.  The REO property did not find a buyer during foreclosure auction.  The bank now owns it.  The bank will see to the removal of tax liens, evict occupants if needed and generally prepare for the issuance of a title insurance policy to the buyer at closing.  Do be aware that REO’s may be exempt from normal disclosure requirements.  In Georgia, for example, properties are usually sold As-Is with no sellers disclosure, a document that normally requires sellers to tell you about any defects they are aware of.

rightIs it a bargain?
It’s commonly assumed that any REO must be a bargain and an opportunity for easy money.  This simply isn’t true.  You have to be very careful about buying a REO if your intent is to make money off of it.  While it’s true that the bank is typically anxious to sell it quickly, they are also strongly motivated to get as much as they can for it.  When considering the value of a REO, you need to look closely at comparable sales in the neighborhood and be sure to take into account the time and cost of any repairs or remodeling needed to prepare the house for resale.  The bargains with money making potential exist, and many people do very well buying foreclosures.  But there are also many REO’s that are not good buys and not likely to turn a profit. 

Ready to make an offer?left
Most banks have a REO department that you’ll work with in buying a REO property from them.  Typically the REO department will use a listing agent to get their REO properties listed in our Warner Robins MLS.  Since banks almost always sell REO properties “as is”, you’ll want to be sure and include an inspection contingency in your offer that gives you time to check for hidden damage and terminate the offer if you find it.  As with making any offer on real estate, you’ll make your offer more attractive if you can include documentation of your ability to pay, such as a pre-approval letter from a lender.  After you’ve made your offer, you can expect the bank to make a counter offer.  Then it will be up to you to decide whether to accept their counter, or offer a counter to the counter offer.  Realize, you’ll be dealing with a process that probably involves multiple people at the bank, and they don’t work evenings or weekends.  It’s not unusual for the process of offers and counter offers to take days or even weeks.

HUD Homes

HUD-owned homes are a good way to find a good deal and bid on FHA properties that have been repossessed. Homes eligible for Lottery Round become available each Thursday and bids are reviewed on Tuesday and accepted on Wednesday (Owner Occupants Only). Un-sold properties and new listings that don't qualify for the Lottery Round become available to the general public on Wednesday at noon on the general list. Properties stay on the general list for 12 days open to bidding (Investors may bid on homes on general list). On the 13th day PEMCO opens and reviews the bids. If there were more than one acceptable offer, then the bid is awarded to the buyer whose offer resulted in the highest net to HUD. If there were no acceptable offers then the property rolls into Daily Bidding. If a property remains in Daily Bidding for an extended period of time with no acceptable offers then PEMCO will reduce the price of the property and simutaneously re-list it on the market. These Re-list/Price Reductions alway list to the market on a Friday. When a property is re-relisted for a price reduction or another reaon, the property will again have a priority-bidding period so that owner-occupants may have a priority chance to bid on the property at its new lower price. For re-list properties in thier priority period, the priority bidding period opens and reviews all owner-occupant bids submitted during the 5 days on market at the new price. If there was no acceptable offer, investor bids that were placed during the first 5 days are reviewed for an acceptable offer. This entiere cycle is repeated until the home sells.

  • Electronic bidding is the only method to submit offers on HUD Homes
  • Buyers cannot submit bids. A HUD-Registered agent must do so on their behalf.
  • All HUD homes are sold AS-IS
  • Buyers must have pre-approval letter and be fully qualified prior to submitting an offer, because their is no financing contingency
  • Buyers must have earnest money check in certified funds prior to submitting an offer
  • HUD homes can found at www.hudpemco.com
  • Any real estate broker who is registered with HUD may show HUD homes and submit offers
  • Who can buy a HUD home - anyone. All a buyer needs to do is find a property for sale, obtain financing, and ask a HUD registered real estate agent to submit an offer.
  • HUD homes vary greatly when it comes to price, location, and condition
  • HUD homes are not low-end housing
  • Homebuyers who purchase a HUD home with FHA Financing can purchase with only $100 down
  • Earnest money required for homes less than $50,000 is $500
  • Earnest money required for homes $50,000 and over is $1,000

View HUD owned homes for sale in Warner Robins GA on my website at http://www.johncobbmiddlega.com/Warner_Robins_Georgia_Real_Estate_and_Homes_For_Sale_in_Warner_Robins_listings/HUD_Homes_listings.shtml

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John W. Cobb

REALTOR® jcobb@coldwellbankerssk.com

Coldwell Banker, SSK Realtors

Cell – (478) 396-2440

Work – (478) 953-8595 ext 272

http://www.johncobbmiddlega.com





 

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