Before we offer a few tips to buying REO (
wned) property, many home buyers just beginning to explore the opportunities in buying distressed Houston properties need a few terms defined in order to be a smarter home buying consumer.
Houston REO Defined
A Houston REO property is defined as a property that goes back to the mortgage company after an attempt has been made to sale the property in a foreclosure auction. Many times foreclosed properties fail to sell at auction. If there was enough equity in the property to satisfy the loan to begin with, the Houston homeowner would have probably sold the property and paid off their home loan to the bank. Hence the reason for the property to arrive at a foreclosure or trustee sale.
The Reason for REO Properties
REO properties almost always are valued less than what is owed to the bank in a loan balance, fees and penalties which is why few foreclosure auctions result in a successful sale. When the defaulted property reverts back to the bank it then becomes
real estate owned
by the bank or REO property.
5 Money Saving Tips When Buying Houston REO Properties
Once the bank takes possession of the property and removes the mortgage loan, the borrower will be evicted. Repairs may or may not be performed. The bank will negotiate the settlement of any outstanding IRS tax liens and pay off any outstanding homeowner’s association dues. Below are your 5 money-saving tips when buying a Houston REO property:
- Plan on a home inspection
- Order a property survey
- Have your attorney perform a title search
- Ensure all liens have been removed
- HOA dues should be current
Not all Distressed Properties are Bargains!
Just because a bank now owns a Houston property, never assume it will be bought at a bargain. With the assistance of the Zoller Group and a little "homework" on your part, you can make a smarter purchase. Always consider the potential costs of renovation and repairs, and always consider including additional time to complete them. With the help of the Zoller Group
, we will help you avoid getting caught up in a bidding war or pay more than market value for the property. Contact the Zoller Group
today and together we will help you explore Houston REO properties in the neighborhood of your choice.