Answers to Your Questions About Foreclosures
Foreclosed homes and Real Estate Owned (REO) or lender-owned homes can be very attractive to home buyers. Low prices lead many people to consider buying one of these homes for themselves, or as investments to add to a portfolio of rental properties. There are many opportunities, but buying foreclosed and REO properties requires knowledge and experience.
Our REMAX Advantage Plus team has several agents with extensive experience with REO properties. We’re always ready to help our clients find and purchase such properties, and to answer questions about this specialized area of real estate. As licensed agent members of Northstar MLS, we are happy to help you search the Minnesota MLS listings for you. We hear many of the same questions frequently, so here are some answers to your questions:
- How can I beat the multiple offers on a property? – It’s not uncommon for there to be multiple offers. As a buyer, increasing the amount of your earnest money, being flexible about closing dates, being willing to consider withdrawing inspection contingencies, and making an offer over the listed price can possibly overcome multiple offers. Those measures aren’t a guarantee, but they can improve your chances.
- Why can’t I get an answer from the listing agent? – There are a limited number of Minnesota MLS listing agents who get the vast majority of foreclosure and REO listings. They are often overwhelmed with information requests. If you’re looking to buy, your patience may be stretched to the limit.
- Why aren’t I getting disclosures? – It’s common for REO properties to have very limited disclosures. Every buyer should be careful to get all possible information about a property before making an offer. Banks often try to insist that you buy the property “as-is.”
- Will an inspection find all the problems? – It may not. In some cases, particularly during the winter months, some systems such as plumbing, heating, and air conditioning may not have been tested in a non-winterized home. Look carefully at all inspection reports and note any deficiencies and uninspected issues. Exercise all due caution before making any commitments. If the home inspection reveals flaws, consult with your Realtor right away.
- How can my buyer’s agent help? – Your buyer’s agent can check to discover missing time of sale inspection reports, double-check whether the bank or other lender has agreed to make repairs or whether they want an “as-is” form and refuse to make repairs. Your agent may have to be very persistent to get answers from the lender or bank. Your agent will also know how to deliver any offer you may make. Listen to your agent carefully and make sure you understand all aspects of any REO property transaction. You can rely on his or her experience.
- Can I make a low-ball offer on an MLS listed foreclosed home? – Probably not. Banks know what they want for a property and will usually not go below that amount, regardless of how many foreclosed or REO properties are on the market. A low-ball offer will most likely be a waste of time.
- Are there alternatives to buying bank-owned properties? – Absolutely. If you’re looking for bargains, be sure to check the retail market, where you may well find attractive properties at surprisingly low prices, especially if you’re willing to make necessary repairs and upgrades. Short sales are also an option to consider, if you have the patience and time for what can be a long process.
- Are there any other potential issues with these properties? – Yes. You need to read purchase agreements and other documents very carefully and completely. Take nothing for granted. Watch for addendums added by the bank that try to close any possible loopholes. Watch dates in purchase agreements closely to avoid missing important deadlines. If you’re borrowing from a lender, be sure you know all contingencies and deadlines. Be very careful, too about who pays unpaid taxes and assessments. This information will be listed in the purchase agreement. Consider every aspect of your purchase very carefully before finalizing any deal.
- Should I just forget about REO properties? There are many opportunities to get a property at a great price in this market, but there are many risks, too. If you approach this type of purchase with your eyes wide open, realize that many others are competing for these bargains, and listen to advice from your buyer’s agent, you can find good values. However, if you’re looking for a killer deal on a great property with no problems, you’re likely to be disappointed.
Top REMAX Agents – Members of Northstar MLS of Minnesota
Foreclosures, REO homes and short sale properties attract bargain-hunting buyers, either for their own use or as investments. At our REMAX team, we have several professional, licensed agents who have experience in this area of real estate. You can preview foreclosed properties listed with Participants of Minnesota Northstar MLS, using our search tool. These properties are available throughout the Minneapolis St. Paul metro area.
In addition, all of our licensed agents are members of Northstar MLS, and we will be glad to assist you with such any searches, based on your specifications, and give the full detailed information that helps you make the right decisions. Contact us if you are interested in buying foreclosed or REO MLS Listings for yourself or for an investment. We’ll be happy to show you how we can help.