Why Buy REO Bank Owned Property?

This article discusses the pros and cons of buying REO bank owned property. First we need to know and understand what a bank owned property is. A bank owned property is a property which has already gone through the foreclosure process and did not sell at the trustee's sale so the property went back to the bank who foreclosed.

Why would one want to buy a banked owned property? The answer to that is fairly simple. Most the time it is possible to get these types of properties for a real bargain or discount. Sometimes the bank simply wants to get rid of the property and will take pennies on the dollar of what was actually originally owed. This means huge savings for individuals. You may be thinking if there are huge savings how could there be any negative to buying a bank owned property?

The first negative aspect to buying a bank owned property is these type of properties are almost always sold As-Is so buyer must beware. You'll want to make sure that you do a thorough inspection of the property since the bank will not want to do any repairs. Since these properties are most likely vacant there is a chance that the property could be vandalized or perhaps the previous owner removed a lot of things from the property. It's best to go see the property again a few days before the close of escrow. There are times where these homes could have some serious defects due to vandalism or if they are not thoroughly inspected repeatedly during the sale process. Homes contain building materials or appliances that have lots of value and since they are left unattended without security alarms they are targets for burglars.

The second negative is that dealing with the banks can sometimes be frustrating. When submitting an offer to them they often take longer to respond than when dealing with individuals. Expect to wait a period of at least 72 hours to at times over a week for a response.