10:26 AM
Swee Ng
REO Homes for Sale in Phoenix AZ area
Posted on March 12, 2015REO in short of Real Estate Owned is a term used to describe a property owned by a lender - typically by bank, government agency, or government loan insurer, after an unsuccessful sale at a foreclosure auction. In short, it is also known as Bank Owned Property by today consumer.
Typically there are 4 types of REO properties: Regular Bank Owned, HUD Homes, Fannie Mae and Freddie Mac.
Regular Bank Owned (Chase, Wells Fargo, Bank of America and etc...)
In regular bank owned scenario, the seller is the bank. The process of buying a regular bank owned homes are still the same as traditional sale. The differences are now your Buyer Agent will negotiate with and Listing Agent and the bank's asset manager instead of the home seller.
HUD Homes
A HUD home is a 1-to-4 unit residential property acquired by HUD (U.S Department of Housing and Urban Development) as a result of a foreclosure action on an FHA-insured mortgage. HUD becomes the property owner and offers it for sale to recover the loss on the foreclosure claim.
There is a 15 day exclusive listing period for Owner Occupants, Non-profit and Government Agency. If there is no bidder after 15 days, it will open to all buyer, including investor.
HUD Homes are being sold in bidding process. Bids are accepted based on HUD's guidelines which include the highest net, not highest price.
Fannie Mae Homes
Fannie Mae Homes are properties that are foreclosed home and acquired by Fannie Mae. Fannie Mae Homes are being sold through Homepath.
Fannie Mae offers Fannie Mae's innovative First Look marketing period was created to promote homeownership that allow owner occupied homebuyers to negotiate and purchase foreclosed properties before they are made available to investors. First Look is typically the first 20 days a property is listed on HomePath.com (Nevada is 30 days).
Freddi Mac Homes
Freddi Max are being sold through Homestep. Homestep is the Freddie Mac sales unit responsible for marketing and selling Freddie Mac real estate owned (REO) homes to homebuyers and investors. HomeSteps manages every stage of the REO process, from handling title issues after foreclosure to working with local listing agents to facilitate a sale.
Freddie Mac offer homebuyers and select non-profits an exclusive opportunity to purchase HomeSteps homes prior to competition from investors through the Freddie Mac First Look Initiative for the first 20 days (30 days in Nevada), on the market.
What should Buyer knows about buying an REO Home?
Buyer should know the market. Buyer may be able to find a "deal" when buying an REO home, but it's more important than ever that the offer price is comparable with other homes in the neighborhood. Most banks will negotiate; however, the goal is to sell the home at or near current fair market value.
Another thing might consider when buying a REO Homes. Budget. Most REO homes are sold "AS-IS," so buyer needs to consider the costs for renovation and/or repair and the time required to complete them. Most bank will make necessary repairs and maintain the home after the foreclosure, but buyer may want to make some as well.
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