Buying a REO home in San Antonio can be fun, or it can be a complete disaster.
First steps are:
1. Find yourself an experienced professional REALTORÂ® whom you can trust . Your agent can save you lots of time and mis-steps. It helps if they have done successful REO acquisitions previously. (We volunteer if you don't already have one.)
2. Always arrange financing before bidding. Most lenders will not even consider an offer on a bank-owned home without a pre-approval letter from a solid lender. Some require that you be pre-approved by them, (although they do not require that you actually borrow the money from them).
You can find information on how to place bids on http://bidselect.com/
or contact us at http://Tellellen.com.
Some REO properties are listed on MLS, some are not. Your agent can show you ANY property that is for sale, regardless of whose name is on the sign or advertisement. Generally, you will want to see the property and even have it inspected by a professional. Most Repo homes need significant repairs. The previous owner most likely could not afford to maintain it. Almost ALL REO properties are sold "AS-IS" - that is, no repairs. If you like the home, have your contractor check it out so you know the approximate cost of any repairs that will be needed. Calculate that into your offering price, INCLUDING the cost of holding the property while the repairs are being done. Those holding costs include taxes, interest, insurance, security, utilities, etc., Add a little profit for yourself for the aggravation.
So, the calculation goes like this:
1. Determine the "As Repaired Value", that is, what would it be worth if it were in above average condition for that neighborhood.
2. Subtract the cost of repairs needed to bring it to that condition.
3. Subtract the holding costs.
4. Subtract your reasonable profit.
The resulting number is the maximum bid you should submit.
Buying a REO can be very profitable, if you do it right. Like brain-surgery, it is not a good do-it-yourself project. Let us know if we can be of assistance.
Ellen and Doc Stephens, REALTORSÂ®