Some of the best deals in real estate are foreclosed properties. REOs (Real estate owned) and short-sale properties have flooded the market, and buyers are taking advantage of the lower prices. But it’s important to understand what is involved with REOs and short sale properties and to know what you’re getting yourself into if this is the route you decide to take.
REOs are properties that banks have foreclosed on after the homeowners have not been able to make payments. Financial institutions are left with the burden of maintaining the properties and selling them in a challenging market. In order to unload the homes, banks often price them below market.
Short sales are a bit different from REOs. These are properties that a homeowner owes more than the value of the property and the lender has agreed to sell for less than the amount owed on the mortgage and forgive the seller their remaining debt.
REOs and short sales can be great deals, but they are more complicated to buy than traditional homes. If you’re thinking of looking in this market, here are some suggestions:
It’s been a long time since we’ve seen such a large number of foreclosures on the market. People are taking advantage of the lower prices, but these transactions can be trickier than standard sales. A foreclosed property could be one of the best investments you make, but also the most complicated. If you take time to research and talk to real estate experts in your area, you will likely find yourself reaping the benefits of your investment for years to come.
Chris Jensen is the managing broker, Coldwell Banker Residential Brokerage of Utah, Park City office.
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