Thursday 21 April 2011

Real Estate Owned (REO) Properties and Instant Equity

Buying a home to live in is probably the biggest investment of a person. Everybody wants to get a bargain when buying a home. In the current real estate market when the value of real estate properties is declining, people find it difficult to Buy a House at discounted price. There are home buyers who ask me questions like if it is possible in the current real estate market to get a property with some equity in it. So, in this article, I would like to answer this question in detail and give you another useful Home buying tip.

There are few different ways if you want to Buy a Home with instant equity. The best way of course is to go for foreclosed properties and more appropriately REO or Real Estate Owned ones. REO properties are properties that are owned by a lender after they have gone through an unsuccessful sale at some foreclosure auction. The lender is usually a bank. These properties are held by banks and their prime importance is to sell them as soon as possible. So, there are always chances for the home buyers to get a discounted property when they go for these REO properties. They can buy these homes to live in or as real estate investment properties below market value. This is the tip for home buyers.

One of the other ways to get instant equity is to go for properties with short sale. Let me explain that with an example. If you have a client that is selling a house and he owes $200,000 whereas the house is worth $150,000, then there is a chance that bank lets you buy this house in $130,000 - $ 135000. In this way you will get an instant equity of $15000- $ 20,000. In most cases these short sales won’t need as much work as the REO’s, however the time it takes to close on a short sale is considerably longer than that of an REO.
The other thing to get an instant equity is to look for some Real Estate Owned properties as I have explained above. However, with the REO market you have to know that you are going to be putting a little sweat equity in. You might have to paint the place up. You might have to put some new floors in and update the kitchen.  But in those cases with REOs, you can almost guarantee that you are going to be getting yourself a good deal if you negotiate properly. 

However, before you bid on the deal you need to know whether the property you want to buy has any violations pending against it.

If you want to get free access to REO’s here in New York head over to http://www.maxreturnsrei.com/buy-sell-homes/ or gives us a Call at 1-800-793-5015 x 702 and one of our knowledgeable buying coaches will help answer your questions.

In my next article, I will come up with some more Home Buying Tips to guide you How to Buy a House.

16 comments:

  1. I am also amazed at how few real estate listings don’t inlcude floorplans, whether CL or real estate agent sites. To many, even more important that the quantitative stats are things like they flow, room size, closet space, window/door placement.

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  5. REO is a great way to gain instant equity. but it seems like most of them need a great deal of fixing up. If you are handy this is a great way to gain equity. If now short sales are great, however they take much longer to close

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  6. Yes I am interested about Buy a Home with instant equity. I read you REO plan and I am satisfied with your information. I will keep in mind before buying homes.

    Thanks
    New Jersey Real Estate

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  8. Finding Reo's to purchase is a risky deal for investors but a prime chance for someone trying to get a cheap home to live in forever.

    Thanks,
    San Diego Real Estate Blog

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  9. REO properties do represent good buys in this market. Good pointers

    All the Best From Ocala Florida Real Estate

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  10. This comment has been removed by the author.

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  11. Equity is a great advantage though one must then be able to create a great deal in order to gain this. Anyway, you have a well written tip, and it indeed add information to me.

    Keep it up John Mathew!

    Thanks,
    Philippine Real Estate

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  13. In buying a house, one should wise enough to know what is a good deal. Thanks for sharing this wonderful post. Great tips!

    Best Regards from Park City Real Estate

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  14. This has been a very significant blog indeed.Thank you for sharing such relevant topic with us.

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  15. Great info! I used to dabble in the REO market myself.

    Search the Austin MLS

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  16. Buying a home is defiantly the biggest investment you can make besides starting your own business. Spokane Banks

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