Phoenix Urban Living News. Real Estate In Phoenix Arizona

REO (Real Estate Owned) Phoenix Sales

REO (Real Estate Owned) Sales: REO is just a fancy term for “Shucks, I still own this property because I couldn’t sell it at auction” that the banks have. Many foreclosure properties aren’t selling at auction because the amount owed on the mortgage is as much or more than the market value of the home? Well, when the property doesn’t sell, and the bank has evicted the owners from the home, it goes to REO status. This is where we think a lot of the value to buyers is, because the bank at this point must sell the property. It’s vacant, and the bank has no hope of getting any mortgage payments while it sits vacant. Plus, REO properties are handled much like traditional sales, where you are not pressured to move fast (like you would be in an auction setting). You can take your time, perform your inspections, and make sure this is truly the property you want.

Sometimes, the owner still lives in the property even though it has been foreclosed upon. In those cases, the bank often offers the owner a “cash for keys” agreement where the ex-owner is paid a sum of money - between $500 to $2,000 - to leave immediately, and give them the keys. The bank figures this is cheaper than evicting someone.

Post-REO Auction: If the banks can’t sell their inventory as REO inventory, they use a private auctioneer to auction it off (often at hefty discounts). These auctions can be tempting, but you face risks here as well. One issue is you usually cannot inspect the interior of the property before bidding on it at auction. It can also be difficult to obtain financing for these types of properties, since you can’t perform the usual inspections & contingencies to ensure the property is in livable condition. The properties are also sold in “as-is” condition and you have to pay a premium above the final winning bid price (usually 5% to 10%) to the auction house.

Looking to by REO for sale homes…never do it without the help of an expert realtor. Bette Zerba can show you these availble REO sales throughout the Phoenix metro area and help you through the buying process for a smooth, stress free transaction. Call Bette Zerba GRI Realtor Re/Max today at 602-791-1766  Or visit www.freephoenixmls.com