Foreclosure in Traverse City>Question Details

Jon, Home Buyer in Traverse City, MI

What are the problems with buying an REO ( wellsFargo owned)?

Asked by Jon, Traverse City, MI Fri Oct 19, 2007

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12
An REO - meaning Real Estate Owned by a bank is property that already has went through the foreclosure process and the bank now owns the home and is selling the property. They usually are not hard to buy but you do need a lender approval letter saying that you qualify for the amount of the offer you are making. Some REOs do have you use a bank of their choosing and you must use their bank -but that will be spelled out in the MLS (Multiple Listing System) and your agent should be able to assist you with this. Hope that answered your question.

Reference Link: http://reohomes.org/wells-fargo/
0 votes Thank Flag Link Wed Jun 10, 2015
Jon, as mentioned below, be sure to get all the inspections needed and do your best to have a contractor come through the property. Many foreclosures are in poor shape but not all of them. In our market here in TC the lower priced foreclosures are moving fast so be prepared to get the inspections and have your pre-qualification or proof of funds letter ready to submit with your offer. There are some great deals out there but it may require moving swiflty to obtain the home.
If you need any additional info or assistance on your search for a home please do not hesitate to contact me anytime.

Brian
0 votes Thank Flag Link Thu May 24, 2012
Title search can take a long time. My family and I are on the streets, belongings in storage and waiting for a closing date. The title company is owned by the same bank doing the mortgage. We can't get any answers from the closing attorney..Beware, I just found out it can take a few days or a few months! No one told me that in the beginning.
0 votes Thank Flag Link Mon May 21, 2012
As a contractor that works closely with banks and investors alike, i can tell you as fact you should always use a knowledgable contractor to inspect any property you are considering wether the property is old or new. All properties have flaws and some more than others. Buyer beware !
0 votes Thank Flag Link Tue Jan 12, 2010
I am an REO agent for Wells Fargo. Most banks are selling their property in an as condition. Make sure you have a good home inspector or contractor look at the home, so you know what you are getting into before you buy the home. You never know the home may be in good condition.
0 votes Thank Flag Link Thu Dec 6, 2007
The problem you are up against is the banks do not want to end up in the same situtation that they are in right now. Banks are going to do there own homework and take less information provided by outside people. In the future I think you might see less mortgage brokers and apprasers do to the simple fact alot of them lied and slammed people into loans they should have never qualified for in the first place.
0 votes Thank Flag Link Thu Dec 6, 2007
Hello Jon,

I would like to add a problem I have been encountering with Reo's which I did not see addressed by the other agents. I'm seeing more and more banks require you qualify through them, such as Wells Fargo and or Countrywide. I have seen many people not be able to qualify through the banks stringent criteria, even though they may already have full approval from another lender. This may come up if they require you to qualify through them first. Get more information on their process if you can.
Good Luck,
Ken Herrera
Century 21 Infinity
http://www.C21Infinity.com
0 votes Thank Flag Link Fri Oct 19, 2007
Really try to get a contractor or other such professional walk through the house if you can...be very cautious for secrets hiding behind walls, and issues of deferred maintenance.
Web Reference: http://www.iansellsnola.com
0 votes Thank Flag Link Fri Oct 19, 2007
Same as any other foreclosure... have excellent inspections and do your background work. If it's a good deal - act quickly and with confidence.
Web Reference: http://www.DanaSellsGR.com
0 votes Thank Flag Link Fri Oct 19, 2007
The risk is primarily in not knowing the condition or history of the home. This can and should be controlled by very thourough inspection of the propery. Often REO properties can be difficult to inspect, as the power may be off, and gas shut down, etc. Having a good Realtor representing you is invaluable in making sure you've done all you can to prevent suprises.
0 votes Thank Flag Link Fri Oct 19, 2007
Ho Jon:

You want to make sure that you do thorough inspection on the house to make sure you understand fully the condition of the home before you buy it

Bank owned homes do not come with disclosures or much documents and are sold "AS IS". - since they did not live in the house, so they can claim they don't know anything about the house. That risk is completely upon you.

Make sure you have a Realtor represent you and get a great comparable market analysis from the Realtor so you know fully that after you spent the time and money to repair, upgrade the house, it is still as good a deal as it seems to be.

Because... a big surprise .. sometimes REOs are not such a bargain after you figured in all the costs, but it sure can be a great deal!

Just make sure you do your due diligence.

Best,
Sylvia
0 votes Thank Flag Link Fri Oct 19, 2007
Sylvia Barry,…, Real Estate Pro in Novato, CA
MVP'08
Contact
Like most other REO properties the seller (Wells Fargo) is not in the business of selling real estate. These properties are foreclosed, therefore, the seller wants to get rid of them asap and they don't want to spend any more money on them. So, you'll find that most of the time they are sold as is. Which it would be to your advantage because you can fix them up and realize higher value.
0 votes Thank Flag Link Fri Oct 19, 2007
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