Three Tips for Buying a Foreclosed Home From the Bank

Some areas of the country are still experiencing a heightened volume of foreclosures which means local lenders continue to have a higher than normal volume of REO (Real Estate Owned) properties in their portfolio.  Now, you may have heard you can get a good deal on foreclosure homes because banks want to get them off their books.  It’s true, banks make their money making loans, not as landlords, but purchasing a foreclosure is much different than purchasing other Edmond and Greater Oklahoma City homeowner owned property in your market.  Here are a few suggestions when looking into purchasing a foreclosed home.

First, have your Realtor research Realtors in your area specializing in foreclosures.  How will they do that?  If they don’t already know the specialist they will comb through the local MLS (Multiple Listing Service) and the internet for foreclosure listings in your area to find out which Realtor(s) are listing them for sale.  Banks limit the number of Realtors they work with to sell off their REO assets in any one area to a relatively small number.  These Realtors not only represent current listings, they will also know about other properties soon to hit the market.  Having your Realtor open a dialogue with the local specialist can help you learn about properties before they hit the market.

Additionally, as with any home purchase you are better served to walk into the foreclosure purchasing conversation having already been pre-approved for a new mortgage.  Realtors specializing in bank owned properties and the REO departments of those banks have many homes to manage.  Show them you are a serious by coming in as a pre-approved buyer.

Finally, keep in mind you will be purchasing any foreclosed home “as-is.”  Banks don’t want to put good money in after bad.  They want quick, issue free closings.  As we stated above, REO departments are managing many properties, and do not have the time to manage repair projects.  Their stance is they have already lost money on the property, and justify the reluctance to cover repairs with a lower resale price.   Food for thought.


What Home Buyers are Looking For

What are Edmond and Greater Oklahoma City home buyers looking for nowadays?  Are they looking for that three-car garage, or bigger back yards for family cookouts?  What’s at the top of the list?  Some of the following features and benefits have been on buyers’ wish lists for decades.  Some have been on the radar for only a few years.  All of them relate to the economy.  Check out this comprehensive article by RIS Media for a list of the surveys and studies we used in the compilation of our list.

  1. Good schools.  Living in a good school district is not just important to home buyers with children.  Studies show good schools have a direct and positive impact on the property values of all homes within the district.
  2. Commuting distance.  Living closer to your work place has a direct impact on lowering your fuel budget and increasing the amount of quality time you have with family after the closing bell.
  3. Energy efficient design.  Buyers are looking more often for energy efficiency including energy-star rated appliances, windows, and even an energy-star rating for the whole house.
  4. Affordability.  This includes buyers purchasing homes that reduce their overall income to housing expense ratio though they may very well qualify for larger mortgages.  The economy and recent recession hit many not only in the pocket book but also in the savings account.  Consumers have had to start making tough decisions on managing their housing costs in an effort to get back to saving for retirement.