Foreclosures

As many of you may know, I handle foreclosures for several major banks. Foreclosures can be a great value as they are typically priced below non foreclosures. However, there seems to be some confusion over foreclosure pricing.

Foreclosures are also known as REO properties. It seems many buyers think that an REO (Real Estate Owned) property listed at $100,000 by the bank will sell for $70,000 or below. This is not the case. REO's are already usually priced below their market value and the bank has had their REO Broker, in this case me, due a BPO (Broker Price Opinion) to help set the price. Then they follow up on my BPO with an appraisal. They use the experience of the real estate Broker to aid in pricing the property where it will sell within 90 days or less.

So, I regularly see offers from investors for pennies on the dollar that the bank flat out rejects. These investors are under the impression buying a foreclosed property listed with a Broker is the same as buying one from a tax sale, let's say. At a tax sale, investors can sometimes buy REO's for pennies on the dollar. This is a very common mistake.

If you are in the market for a foreclosure, you can get a very good deal. However, your agent should always do a market analysis prior to your offer so you are assured you are getting the good deal it appears to be. After all, there are overpriced foreclosures, just like any other home. Sometimes, the bank has been given bad pricing advice from their agent and therefore the price is off. It is difficult to get a bank to accept less than what their agent has said it is worth. In those instances, you are probably better off looking for another property.

In closing, my team and I are happy to help you in your home search including bank owned properties. Part of our standard practice is to make sure the home you are buying is priced correctly whether it is a foreclosure or not. We are locally owned and operated and specialize in the Pearland and surrounding areas. If you have questions prior to buying, give us a call anytime as we welcome your questions either through email or phone. The road to home ownership is not as long as you think...we can help. Thanks for reading my blog.