Advantages to buying REO properties

There are a number of advantages to purchasing REO properties. The two biggest advantages however are lower risk and better financing. Compared to purchasing real estate during other stages of the foreclosure process, REO properties offer a good price with little risk. When purchasing a property in pre-foreclosure during a short sale or at an auction buyers risk not really knowing what they are getting due to lack of access to the home for inspection. The financing terms can be costly to get the cash for a quick closing. Once a home becomes an REO property the process is similar to purchasing a home on the retail market. REO homes are usually offered through real estate agents or brokers and are entered into a multiple listing service (MLS). This allows buyers time to inspect the property and obtain more traditional financing.

Take the time to have the property inspected by a professional can payoff in the long run. When purchasing any kind of real estate, the current condition of the property determines the value. Having a professional look at the property and provide a detailed, itemized list of repairs will help the buyer assess the value and make a better offer. If you are offering less than the asking price, having a detailed list of repairs from a third party will help make the case to the bank.
Also, having sufficient time to acquire standard financing will give the buyer more options in selecting favorable financing terms. Buyers who are able to be pre-approved for finaincing increase their chances of closing on a great deal. Keep in mind that the closing process is accelerated and has strict a time line which must be followed.