I want to buy a REO for cash, but how does it work?

Asked by Ms Hayes, San Antonio, TX Thu Jan 22, 2009

I've purchased 2 homes for cash before, but never a REO..I have been told that ususally all of the necessary paper work is in place such as title, inspection, appraisal..how does a reo for cash differ from a regular home purchase other than the mortgage...

I do understand that most REO are as is and need a lot of work...I am also looking in the DFW area...I apprciate any and all answers! Thank You..

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Craig Laughl…, , Dallas, TX
Thu Jan 22, 2009
Purchasing an REO is basically the same as any other purchase except that the REO does not have information about the condition of the property except for what visible to the eye. They will allow you to do inspection in the 7-10 days after an executed contract which allows you back out of the contract and get your earnest money back. There are no appraisals, inspection reports, information about prior conditions, or surveys provided so if you want or need any of them it will be at your expense. They will provide a title policy at their expense. I work with several investors and I am quite knowledgeable about the process. The condition of the property varies but a lot of the REO properties need very little or no work at all.

Let me know if I can provide any further help.
1 vote
Craig Laughl…, , Dallas, TX
Wed Jun 17, 2009
Buying an REO for cash is just like any other house purchase, except that the seller does not have a survey nor a seller's disclosure. You can find REOs that need little or no work or you can pay less and end up have a lot of work to do. If you need advise as to where and how I would be glad to help.
0 votes
Charles, , Marietta, GA
Wed Jun 17, 2009
2704 21st Street SW Birmingham AL 35217

3320 38th Pl North Birmingham AL 35217
3320 47th Street SW Birmingham AL 35221

3572 42nd Avenue North Birmingham AL 35207

1009 Jersey Street Birmingham AL 35224

2712 34th Avenue Birmingham AL 35207

908 2nd Ave. N Birmingham AL 35020

3404 38th Place North Birmingham AL 35217

406 12th Avenue North Birmingham AL 35204

7816 4th Avenue South Birmingham AL 35206

213 14th Court North Birmingham AL 35204

4512 74th Place North Birmingham AL 35206

313 11th Court West Birmingham AL 35204

339 Avenue U Birmingham AL 35214

804 37th Place North Birmingham AL 35222

5 Center Place N. Birmingham Al 35216

1607 Avenue D Birmingham AL 36218

116 5th Avenue SW Birmingham AL 35211

553 Avenue U Birmingham AL 35214
824 42nd Street North Birmingham AL 35212

Per our conversation, I am enclosing the list of properties for sale.
Each house is 15,500 OBO , sold AS,IS ,subject to 2008 county city taxes etc

If you have any questions feel free to give me a call ,

Uriel Willis ,
678-510-6447 cell
770-627-3553 fax
0 votes
Voices Member, , Benton County, OR
Thu Jan 22, 2009
I don't know how much this will help, but on most of the bank REO sites they have information on whatever process they use for the homes they have listed..http://www.mortgagenewsdaily.com/wiki/REO_Database_List.asp


Best of luck, Dunes
0 votes
Rebekah Owen,…, Agent, San Jose, CA
Thu Jan 22, 2009
Morning Ms Hayes,

In an REO, the lender often requires you to use their form. I have heard some concerns over these lender centric forms but if you want the house you use their form.

Other than that, the other responders did a great job; it's as is, you get title insurance, etc.

Lastly, most of my clients are investors who buy with 20% down, get 12-14% returns on their cash flow and leverage their money for highest return.

Good Luck!

0 votes
Bruce Lynn, Agent, Coppell, TX
Thu Jan 22, 2009
No difference really.
The only main difference is typically we'll want to see the proof of cash vs a preapproval letter.
Lots of investors don't want to show that they have the cash so there are a couple of ways around this.
One is to show a preapproval letter from a lender, the other is to show you have the funds. I typically tell my investors to open a savings account connected to their checking. Move the money they need to purchase the house into the savings and then print that out to use with your purchase offer.
Good luck.
Web Reference:  http://www.TexasDistress.com
0 votes
Dallas Texas, Agent, Dallas, TN
Thu Jan 22, 2009
Dallas is a great place purchase homes for sale, and foreclosures with equity.

We work with investors across the country happy assist you based on short/long term goals, specifications budget spent.

Purchasing an REO same as a loan HOWEVER you close faster, you are lower risk that a buyers who at very end of sale process lender changed mind determine NOT issue a mortgage.

All foreclosures CASH - supported with bank statement funds are available in you account including closing costs. We do recommend our cash buyer clients have inspection, appraisal completed UNLESS purchase for lot value only building structure (home) torn down not occupied.

Contact my office
Lynn A. Crosby ~ National Featured Realtor
"...Specializing in Residential, Commercial Properties and Loans..."
Dallas Realtor -
The Michael Group "Dallas Business Journal 08' list top realtors"
Dallas Loan Officer - Homewise Lending
Dallas Real Estate Office:(972) 699-9111
Dallas Real Estate Website: http://www.lynn911.com
0 votes
Voices Member, , Wickenburg, AZ 85390
Thu Jan 22, 2009
Most REO properties are listed with Real Estate Agents who are hired by Asset Management Companies who work for the Bank who owns the property. A Cash deal makes the process much simpler for everybody involved, and it can also make the offer more attractive to the Bank. (They don't have the concern of the Financing fall out for the Buyer) You would first make an offer on the property, which then gets presented to the Asset Mgt Co. then they in turn present the offer to the Bank. It can be a complicated process, so I would definitely recommend using a Realtor to make sure your interests are represented properly.

Let me know if you have any other questions!
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