Why you might want to rethink your plans to buy a Plainfield IL REO in this market if you’re not good with a hammer! | Plainfield IL Homes for Sale
Nov 11th, 2009 by Julie
What?! How could I possibly utter such nonsense? Of course you want to buy an REO! They are the best priced homes in real estate right now!!!
Yes, but most of the time when you figure in the cost of the repairs, you might as well keep on looking.
Of course there’s the off chance that the property is actually in decent shape, in which case you and about 10 other people will have offers in on the house. Then you’ll have to wait until the feeding frenzy is over to find out if you are the one who wins the bid on the property.
Alright, alright. I’m being really pessimistic here, but the reality is… if you’re going to do it, do it right!
If you want to buy an REO to live in and you are not an investor or a cash buyer there are several important steps to take and scenarios to consider:
- If the property needs repairs and you are obtaining an FHA loan, certain FHA provisions may prohibit the sale such as broken water pipes and mold.
- If the property is priced below market value and there are minimal cosmetic repairs don’t low-ball and offer on the property if you really want to purchase it. There are probably multiple offers on the home and the highest most qualified offer will be the one that gets the house. Banks are less likely to negotiate on the price once they have it back in their possession. The REO agent has already priced it for a quick sale. Short sales, well they are a different story…
- The cost of some of the repairs may actually cost you more than the discount on the house, like replacing kitchen cabinets and carpeting.
- There are no disclosures provided by the lender and it’s pretty much a “buyer beware” scenario.
- Some lenders do not allow property inspections as a contingency to the contract.
If you are thinking of buying a distressed property in Plainfield IL or the surrounding area, call me at 630-673-6233. The agent you use to represent you in the sale of a bank owned home can make or break your chances of getting your foot in the door!
Julie Ferenzi | Realtor®
Plainfield IL Homes
630-673-6233
