Buying REO Home Foreclosures in PA
Go to: How To buy a foreclosure in Central PA
REO Foreclosures – What Are They? - Skill Level Intermediate
Once a property is foreclosed upon it becomes the mortgage lenders to resell. Banks holding properties in central PA resell them in several ways. In general, these properties are considered “Real Estate Owned” or “bank foreclosures” In Central PA you will see bank foreclosures most often as a listing by a real estate broker with business relationships with the banks. These listings will be on the public MLS (Multiple Listing Service) as well as the bank’s own website in many cases.
The benefit of buying a bank foreclosure is that the sale closely resembles a traditional real estate transaction – the seller (the bank) has done the title work and you as the buyer can secure title insurance to protect you against liens that may pop up. In many instances the sale price is less than estimated market value as well.
What makes these foreclosure properties a little more tricky is the condition issues and the bidding process that may accompany the property. The sale is typically “as is” so you’ll have to be handy or be ready for contractor costs on top of the real estate price. In most cases, the sale of the property is conducted via an online bidding process where your agent places a bid on the broker’s or bank’s website. This can be a bit stressful, especially when the bank does not respond immediately or holds your bid to wait for additional bids. It’s not uncommon to have to bid on several properties and be outbid.
Most foreclosures in Central PA are REO sales of some sort. If you are prepared you’ll be able to make a competitive offer on one. Here are some suggestions:
1 – Have your mortgage financing ready to go at a moment’s notice. A company like our partners Futon Mortgage and GMH Mortgage Partners are excellent choices to get prequalified and ready to buy.
2 – Be mentally prepared to do some work. REO foreclosures will almost always require repairs and/or maintenance fixes. A good idea is to have contractor like Select Building Services in your back pocket to give you quick estimates of projects that will help in determining your offer prices.
3 – Have financial resources to pay for repairs. Buying any kind of foreclosure will usually entail spending more money out of pocket than a traditional purchase.
4 – Have a foreclosure-smart buyers agent working for you. Many agents don’t work with foreclosures so you want to interview them first and be sure they can work with the bidding processes and understand the world of contractors and repairs.