UPDATE: Thanks for coming to my blog. Regardless of how you got here, this series was written in 2008. The market is ever evolving and hopefully you will find this information outdated. A better source of CURRENT information about buying an REO can be found by clicking HERE: REOs in 2010.
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So, you’re ready to go see some properties. With the REOs flooding the market, the term House Hunt is starting to have a new meaning. Looking at some REOs can be an adventure – think “Wild African Safari”. Here are a few tips on what to expect when you get out there… none of this is fiction, it is based on actual experiences; and it includes mundane information that will bore you, but make you more prepared for the day of "the HUNT". (Watch this video - it will give you a clue! This was prepared by a colleague at another brokerage, but is similar to stories heard around the country!)
==============ORIGINAL POST===================
So, you’re ready to go see some properties. With the REOs flooding the market, the term House Hunt is starting to have a new meaning. Looking at some REOs can be an adventure – think “Wild African Safari”. Here are a few tips on what to expect when you get out there… none of this is fiction, it is based on actual experiences; and it includes mundane information that will bore you, but make you more prepared for the day of "the HUNT". (Watch this video - it will give you a clue! This was prepared by a colleague at another brokerage, but is similar to stories heard around the country!)
Short Sales – In our area, you’ll find that these are often occupied homes, so you must call ahead before going to see the homes. Many times, they're in good shape and very presentable. Sometimes, however, the "depression" of the owners will be obvious.
REOs – Let’s call these what they are – abandoned properties. You never know what you will find.
- There may or may not be a sign out front. You'll likely be greeted by signs that say "WARNING" and then have a bunch of smaller writing...but they will not be warning you of the stuff that they SHOULD be warning you of! - These homes are generally (but not always) “trashed out” – meaning the owner’s stuff that was left behind has been removed. There MAY have been a surface cleaning done. (Tip - DO NOT OPEN THE REFRIGERATOR, even if the house looks clean.) - Previous owners, depressed and angry about their situation, may have deliberately vandalized the home – and sometimes you find some really gross stuff in there. - Locks have likely been changed and the property may be winterized and/or have no utilities in service. Try to plan your trip when there’s plenty of daylight. Sometimes the locks are broken. I had a door knob fall off in my hand once. Bring a screwdriver with you. And, while you’re at it, you might want to bring a flash light, too, and, oh, a pair of rubber gloves never hurt anyone. - Who knows the last time someone checked this property? Check the perimeter of the property, and enter carefully, some of these vacant homes are being occupied by the homeless, or prostitutes. And wild animals, or dead animals (or dead wild animals) are being found inside. - Consider your dress. You could have to walk through the yard to get to the home. The grass could be overgrown (think trash, pet waste, snakes or ticks) or you could enter a home that has a pest infestation. Wearing sandals or heels and a nice suit may not be a good choice.
I do not say any of this to scare you. Banks are taking more pride and doing more to ensure that the properties are presentable. However, I know I wish someone had warned me before I showed a few of these properties!
Traditional Sales – These may be vacant or occupied, so read the showing instructions carefully. They will generally be in presentable shape, they may even be professionally staged. Utilities are usually on, the home is comfortable, and visiting these homes can be pleasurable. Sometimes, they’ll even have nice brochures, smooth jazz playing in the background; there could be take away promo items or even refreshments! Gosh, you’d think these people want to sell! After your first trip out, you’ll be more educated. Look at the prices, consider what cleaning and maintenance costs might be involved. (I had one home inspector make a written recommendation to a buyer client of mine to have the toilet cleaned by a licensed professional.) Talk to your agent about the timelines and potential negotiation and transactional pitfalls to expect from the various types of sellers. Still thinking of focusing on REOs? It’s something to consider. But, make sure you get a good deal.
Now that you have a clue about the market, are you ready? Well... come on! Hop in and let's start looking!
My next post will be on preparing the offer for an REO. So, you can stay up and keep reading... or jump in the car with me, and we'll talk on the way to look at houses!
My next post will be on preparing the offer for an REO. So, you can stay up and keep reading... or jump in the car with me, and we'll talk on the way to look at houses!
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