Anyone who’s even thinking about buying a bank-owned property should read this New York Times article detailing one woman’s quest to invest in a foreclosed home. It outlines in detail some of the many steps that buyers often skip but that should factor into every REO purchase — a transaction that can be an extremely complex, risky process.
While it can be at times a bit tough to follow the buyer’s circuitous route to homeownership (this gal did some serious financial finagling!), in the end, all her efforts did pay off. Granted, many buyers looking at bank-owned properties will follow a different path than this buyer, but the article’s overall message is a valid one: The rewards can be great for those tenacious enough to tackle the job of buying an REO property wholeheartedly and mindfully.
P.S. The headline of the article — “What it Takes to Buy a House in Foreclosure” — is an unfortunate one because it will only further confuse a lot of folks. What they’re talking about here are properties that have already been foreclosed upon and have reverted to the banks — they’re referred to as bank-owned or REO properties (for Real Estate Owned). Trying to buy a distressed property that’s in short sale (where the homeowner must sell the property for less than is owed and the bank must approve the sale — i.e., be willing to take the financial loss) is a whole different ball game.
About the Author:
Lisa Broadwater, GRI, CDPE is a Central Oregon-based real estate professional who specializes in listing and selling homes, especially in Sisters, Tumalo, Redmond and Bend.