Real Estate Buyers Opportunities: Short Sales and REO PropertiesPosted Thursday, February 27, 2014
With prices still low, it continues to be a buyer’s market for those interested in real estate. Some of today’s most profitable buying opportunities are with short sales and REO properties. Not sure what short sales or REOs are?
Here’s a synopsis of each:
A short sale property is when the sale price of the property falls short of the balance owed on the mortgage. As a result, the real estate transaction can involve a lot more time and negotiation than a straight purchase, as the seller’s lender has to sign off on any agreements. The upside for the buyer is that you can make a nice profit because short sales are priced at or below market.
A real estate owned (REO) home is a property that is owned by the lender after an unsuccessful foreclosure auction. Usually, the lender asks a real estate agent to list the property for sale. The initial listing price is often high. Hire a real estate agent who is knowledgeable about REOs to negotiate the price for you and help you navigate the complicated process through to a successful closing.
The average price of short sale properties is close to 20% lower than non-distressed properties, and REO properties are discounted by an even higher percentage.
If you have the time and patience to wade through the short sale process, or are willing to invest in repairing an REO property in less than move-in ready condition, you can reap financial benefits from your patience and hard work.
If you would like to discuss your particular situation, and whether short sale and REO properties might be good options, give me a call today.
For more real estate tips, subscribe to my blog – it’s free!