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Frequently Asked Questions

Q:  What does “REO” mean?

A:  Real Estate Owned. It’s the term the banks use to identify their foreclosure properties.  These properties are also considered distressed properties.

Q:  How is a HUD property different from any other foreclosure?

A:  HUD homes are FHA-insured loan foreclosures. The government owns them. The properties are classified as “insured” or “uninsured”. Those that are insured are in good repair and FHA will insure a new loan for a new buyer for the home. Uninsured properties are typically fixer-uppers, and the buyer will be responsible for his or her own financing. Find out more at www.hud.gov or www.hudhomestore.com.

Q:  What are some general guidelines for your market?

A:  Many of the properties that are listed require an earnest money deposit of $1000 and are sold “as is”. Many REO properties will sell for cash or with a variety of financing including FHA, VA, and conventional financing. It is very possible that REO properties are in distressed condition.

Q:  How are foreclosure properties identified on the MLS?

A:  They are now identified by selecting the appropriate feature; bank owned, short sale or government owned. You may find them by having a real estate broker search the multiple listings system for you. Or search available listings through www.ourforeclosurehomes.com.

Q:  How will the bank determine the selling price? Will banks accept less?

A:  When negotiating with asset managers at a bank for the purchase of a foreclosure, they are considered professional sellers. Asset managers determine fair market value before a property is listed. They order appraisals and enlist the help of a broker to advise them about the property’s condition and value. Based on this information, they determine a price. They may or may not accept less.

Q:  Will banks repair the properties that are distressed?  

A: HUD homes are always sold as-is. The bank will not do any repairs. They feel any repairs should be the responsibility of the buyer since the property’s price is already discounted.