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Buying Distressed Properties:  REO (Real Estate Owned) Sales

OVERVIEW: A property has been officially foreclosed so that the Lender, Fannie Mae, or Freddie Mac now owns the property. These properties can be priced significantly below fair market value. However, bank-owned properties typically list (at least initially) at or near fair market value and work their way through a series of reductions to get to any real aggressive pricing state.

PAY PARTICULAR ATTENTION:

• Make sure that you allow at least 30 days for closing, more likely 45 days, from your offer date to the expected closing date.
• Calculate your lender having the closing package in to the closing attorney as many as 5 BUSINESS DAYS before closing! 
• Make sure that you specify that your due diligence period should begin after a WRITTEN acceptance of the offer
• Make sure that utilities are activated for the home inspection and that the contract states that the due diligence period should be extended if utilities are not active.
• Remember, REO Asset Managers / Liquidation Managers / Loss Mitigation Specialists operate at varying degrees of competency and their workloads and case files can be EXTREME.  This means that it may take some time to get their responses.