Foreclosure in 08094>Question Details

Brenda, Home Buyer in 19701

What options do I have for purchasing a REO house?

Asked by Brenda, 19701 Sun May 10, 2009

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There are a lot of options for purchasing an REO house. You need to know that where there's a great deal with REO's price wise (sometimes), that they present a whole lot of risk on the part of the buyer. The buyer is responsible for obtaining the Certificate of Occupancy and for all repairs. This might not sound big, but you could spend thousands of dollars prior to settlement. You need to make sure that you cover all of the bases and that you are ready for the journey. You need a good real estate agent that will walk through the process with you. It's a rough road, so make sure you hire someone that knows what they are doing. There are options for FHA 203k financing as well as other financing if you don't need money for repairs. 203k financing allows you to get extra money for repairs. There are programs to streamline this process, but you have to realize that it takes time, money and a lot of patience. If you choose the FHA 203k route, you want to make sure that you choose a lender and mortgage rep that specializes in the process. When a lender understands the program, it makes it so much easier for the buyer because with any government program, you have to watch every detail. Make sure you get references. An experienced 203k lender will make it a lot easier on you. I hope this helps. Send me an email if I you need any further information.
0 votes Thank Flag Link Mon Oct 31, 2011
Brenda: You have the "option" of paying for it with a mortgage that may be harder to obtain or cash, assuming the risks involved with a distressed property and the option of making the minimal repairs needed to satisfy local ordinance and the option of fixing it so you are happy to live in it. You will also be faced with the attendant risk of finding that those repairs may cost a lot more than your original estimates. You have the option of determining that most of foreclosures are in lower income areas, with the attendant problems of neighborhood direction: decline or revive?

While there are also foreclosures in “better,” upscale areas, they are much fewer and usually, the lender-owner knows more than you will about how much the place is worth. It’s a game best played by commercial interests.

Bill Holt
Licensed in NJ & PA
0 votes Thank Flag Link Mon May 11, 2009
Hi Brenda, I guess you're talking about financing. Does the home need alot of work, can a Certificate of Occupancy (CO) be obtained without a great expence? If so you could go for a traditional mortgage, they require a CO. If you go for VA, FHA, or USDA loans their inspections are more in depth and might require more dollars.

Speak to a mortgage rep, speak to several. There are a number of programs that might be available to you that are specific to your location and situation.

Laura Giannotta
Keller Williams Atlantic Shore
0 votes Thank Flag Link Sun May 10, 2009
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