Balaji, Home Buyer in Parlin, NJ

To buy REO or not?

Asked by Balaji, Parlin, NJ Sat Sep 4, 2010

Is it worth buying an reo? is it like an accident on a car shown on carfax? Will it hurt if i resell it?

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10
The Stephen…, Agent, Portland, OR
Tue Sep 7, 2010
Absolutely not. I've never heard of a buyer who wasn't interested in a home because it was foreclosed upon - once upon a time. Homes have their current value - that is all. I suppose if someone was killed in the home or there was a newsworthy incident attached to the home, there could be some future problems.
0 votes
Gina Chirico, Agent, Fairfield, NJ
Tue Sep 7, 2010
Balaji,

Buying a REO will not affect the resale value of it. The only thing that affects the resale value of a home is the current market (i.e., if and when you go to sell it, if its worth less than what you paid then it will affect the value) but the fact that it was a REO when you bought it will not hurt you.

Of course there will always be the agent or buyer who says well you paid $X for it and they want to offer you less than its currently worth, but the purchase price you paid has no bearing on what the resale value is....its all about what its currently worth today.

Gina Chirico, Sales Associate
Lattimer Realty
973-715-1158 cell
973-575-6353 ext 17
Gina@GinaChiricoRealEstate.com
Info for Buyers Buying Bank Owned Property: http://ginachiricorealestate.com/Informationforbuyers.html
0 votes
John Sacktig, Agent, New Jersey, NJ
Mon Sep 6, 2010
No Scott, not a cheap shot... but it comes off as a guy that wears plaid pants.

I absolutely know there are great deals in Florida, but to tell someone that there are cash cows available for a steal is nonsense. It makes you sound like a used car salesmen.

These same areas that have these homes, there is no one to rent the houses. There are very good investments for people that have cash and are willing to hold on for a long time, you cannot depend on a rental in economically challenged times and areas.

I would suggest at the same time as speaking to a realtor to speak to a realtor that has a financial background who can set the marks for investment properties. Due diligence is the key.

There will be no repercussions on a later sale.
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Scott Miller, Agent, Boca Raton, FL
Sat Sep 4, 2010
Hi Balaji. Buying an REO does not affect resale. Sometimes they are in MINT condition, sometimes they're falling down.

Make sure you have an attorney represent you in the transaction. When you make the offer, stipulate that seller will pay all unpaid utility bills and back HOA payments. Your title insurance company will make sure you get clear title to convey to you.

Don't close without an attorney.

GOOD LUCK.

Scott Miller, Realty Associates, Boca Raton, FL
0 votes
Balaji, Home Buyer, Parlin, NJ
Sat Sep 4, 2010
thank you both, however does this affect resale ? Something like an accident on carfax?

who takes care of unpaid utilities and hoa?
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Scott Miller, Agent, Boca Raton, FL
Sat Sep 4, 2010
John, that's a cheap shot. Sounds like you're saying that I'm not being truthful with this question.

Why wouldn't I take advantage of cash cows? Can you buy every great deal that passes your way? No. I didn't think so, either.

I have bought my share of cash cows. As far as my clients are concerned, I consider a cash cow something that sold for $200K+ just 4 years ago and now get's bought for $60K, rents out for $1400/mo with no HOA. That's a good deal.

Bank repairs will and do happen when there are serious mold issues, roof leaks and the price of the property is high. The bank still wants to protect their investment.

Balaji, if John 'seriously doubts a cash cow' will fall into your lap, maybe you need to come to FL and forget about investing in NJ. It's happening every day down here.

GOOD LUCK.

Scott Miller, Realty Associates, Boca Raton, FL
0 votes
John Sacktig, Agent, New Jersey, NJ
Sat Sep 4, 2010
Balaji - Think about answer below.. why would the agent not take advantage of these cash cows himself?

REO's 99.999% of REO properties are As-Is.. I have been involved in ONE ( of very many tramnsactions) where the bank performed a repair. THis was because something happened after the bank took possession of the property. Bank repairs usually do not happen.

Due diligence is the key here, you need to know what you are buying and how the system works. You will be responsible for most everything. If you are willig to take the challenge you can get a good deal. I seriously doubt that a cash cow will walk into your presence, but you can get a good deal.
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Scott Miller, Agent, Boca Raton, FL
Sat Sep 4, 2010
Hi Balaji. Both answers below are right.....BUT, I have been involved in REO sales where the bank actually paid for and performed the work to the satisfaction of the buyers.

I have clients that have literally stolen REO properties and are sitting on cash cows renting them out. All it takes is money, a great agent and inspector.

GOOD LUCK!

Scott Miller, Realty Associates, Boca Raton, FL
0 votes
Desari Jabbar, Agent, Stone Mountain, GA
Sat Sep 4, 2010
Buying a foreclosed property can definitely provide great benefits. But as Cooper mentioned, find a realtor who understands the process when dealing with bank owned properties. And, get a comprehensive home inspection. Also, although REOs are sold AS IS. If the repairs are required by the lender, the bank might consider doing them to sell the property.

Best of luck to you!
Web Reference:  http://www.DesariJabbar.com
0 votes
Randi Tirado…, Agent, North Brunswick, NJ
Sat Sep 4, 2010
It depends on the specific house. When you buy an REO, you may save some money, but you are ultimately responsible for all the issues that may come with the house, since the bank is unlikely to do anything. To avoid this, its important to work with an agent who is familiar with REO's and many of these issues, as well as a good home inspector who will be able to identify issues as well.
0 votes
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