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As a residential specialist, I hear these questions all the time: \u201cCan you help me buy a foreclosure?\u201d \u201cWhat about a bank owned home?\u201d \u201cI saw on Zillow that this house is a pre-foreclosure. Can I buy it?\u201d<\/p>\n
Honestly, any<\/em> agent can help you buy a bank owned home, but an experienced REO (i.e., real estate owned, or foreclosure) agent can make a huge difference in the process and in your costs. Some of this may sound scary, but with the right agent, it\u2019s not so bad. Let\u2019s start with the basics.<\/p>\n Financing \u2013<\/strong> How are you going to pay for your home? All bank owned homes require some type of proof for how you plan to make the purchase, and rent-to-own or contract sales aren\u2019t an option. If you plan to use cash, you\u2019ll need documentation from your bank. If you are seeking a mortgage, there are other issues to consider.<\/p>\n Type of Loan<\/strong> \u2013<\/strong> Conventional, USDA, VA, FHA \u2026 there\u2019s a whole alphabet soup of possible loans. But not all properties qualify for all loans. Speak with your agent and lender to determine your options. This will help you find houses that fit your loan. Veterans Affairs (VA), rural area (USDA) and Federal Housing Administration (FHA) loans are pretty strict on guidelines for a home\u2019s condition, and they may not cover renovations. Situations can also vary depending on which bank owns the home. There are some rehab loans available (best discussed with your lender and agent).<\/p>\n Finding Your Home \u2013<\/strong> As for bank owned houses, your agent can provide you with a list, or you can find these properties on your agent\u2019s company website, or sometimes through other large real estate sites. And no matter what you\u2019ve heard, you<\/em> don\u2019t need to pay for a list.<\/em> There is no secret list of bank owned homes out there.<\/p>\n Showings \u2013 <\/strong>Going to check out these homes can be a fun adventure! You never know what you\u2019re going to find. The downside is sometimes it\u2019s gross. Avoid bringing small children or your extended family with you. I\u2019ve been in houses with mold, bad floors, holes in closets that led to the basement, missing steps in staircases and more. You get the picture.<\/p>\n This is also the time to be brutally honest. We\u2019re not all like Chip or Joanna on HGTV. Some properties need everything removed, some not as much. Rarely do you see a house that just needs paint and deep cleaning. Almost all need some major work \u2014 usually with the windows, roof, flooring and\/or plumbing.<\/p>\n