Katie Tan, Both Buyer and Seller in Fort Lauderdale, FL

I am a first-time buyer and found a nicely priced REO property but am nervous about buying it. What kind of precautions should I have?

Asked by Katie Tan, Fort Lauderdale, FL Fri May 10, 2013

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If your are looking at an REO home in Fort Lauderdale and you are not armed with sufficient cash to purchase the home, and maybe even pay above the asking price, then your contract has little or no hope of being considered by the bank.

REO homes are sold to the highest and best bid. Highest is self explanatory. Best refers not only to cash, but to closing terms: how quickly can you close; are you willing to forego inspection or waive the inspection clause in order to move to the finish line.

And if you have the cash, be aware that REO homes in Fort Lauderdale, or anywhere else for that matter, typically have expenses built into them. If the air conditioning has been off during the months that the property was unoccupied there will be mold issues. There may have been vandalism by the previous occupants or by others who have visited the property while it stood empty. There may be roof issues.

An inspection will let you know the problems. Just be aware that the bank is not obligated to repair anything you find.

Marc Jablon, The Jablon Team
RE/MAX Complete Solutions
JablonTeam@gmail.com
561-213-6139
http://www.JablonTeam.com
0 votes Thank Flag Link Fri May 10, 2013
You have a right to be cautious. REO are most often sold "as is" with a lot of hold harmless contingencies from the seller (bank/lender/creditor). Your best and first move when buying a REO is to let your agent schedule a showing to see the property in person. You may bring an inspector or someone who knows home construction etc to help detect visible signs of structural damage or leaks etc. (This is not your official inspection).

Your agent should ensure that you have an inspection time frame and an opt out clause contingent on the findings of that inspection.

You can be cautious but make sure you have right to inspect and cancel. Most of your precautions are based on what you would more than likely find out from the inspection.

Hope that helped.
0 votes Thank Flag Link Fri May 10, 2013
Your profile states you are both a buyer and a seller. Then you write that you are a first time buyer....sort of confusing.

A good Realtor will be able to answer all those questions for you and many more you will think of in the process. REO sales are pretty straight forward, no big surprises, you get what you pay for. Just make sure to pay for a good home inspection above all else. Of course that will be once your offer gets accepted which is the real tricky part. If you are a serious buyer don't hesitate in offering above the asking price when you find the perfect home (or you will lose it to another buyer). After the offer gets accepted then you have time to think about it, do inspection and cancel if need be. But if you do all the worrying and paranoia before submitting the offer.... you will see many good homes go to someone else. Was this answer helpful? If so please click on the "green thumbs up" or the "best answer".

Tony Vega
Antonelli Realty
0 votes Thank Flag Link Fri May 10, 2013
Katie,

If you're not already you should be working with a Buyer's to help navigate through the process. Hesitating to make an offer on an REO property you are genuinely interested will likely end up with you not getting the property as in most cases they are multiple bid scenarios, meaning there may already be others offers on the property by the time you decide to move forward with an offer. As for precautions, you still have the ability to conduct an inspection as you would with a traditional sale so there is not any need I worry in that regard. Let me know if you have any additional questions or want me to see if the property is indeed still a available and not under contract.

Sincerely,

Ryan Hanrahan, PA
Christopher White Group
954-608-0527
rkh5656@aol.com
0 votes Thank Flag Link Fri May 10, 2013
Their are pros and cons about buying an REO. The cons are that most of the time you are agreeing to buy the home in as-is conditon and you really don't know what problems the property has behind the walls. You can do an inspection but most banks don't give you sufficient time to inspect the homes since they have multiple offers at the time and they prefer simpler terms or else, they will go with the buyer thats offers them The pros are that you are buying a home at under market value and you get a better price, but this is not always the case. Good luck!
0 votes Thank Flag Link Fri May 10, 2013
You just hesitated; it is probably gone.
You will need a Buyer's Agent in your corner; do it now; and be ready to act quickly:
You will probably have to make 10 offers to get one.
If you're not prepared to do that; do not start.
0 votes Thank Flag Link Fri May 10, 2013
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