REO’s a Great Option for First Time Buyers
Buying REO Homes, First Time Buyers
September 15th, 2009
Just the other day I overheard an agent talking on the phone with a first time buyer client regarding purchasing an REO property. The agent explained to the buyer that in their experience it has been difficult for a first time buyers to get financing to purchase bank owned properties and was steering them away from this option. The agents thinking was that as REO’s are typically listed for sale in “as-is” condition with no repairs it would eliminate them from consideration. This is actually a pretty widespread misconception believed by many in our industry. Don’t fall for it. REO’s are a great option for First Time Buyers.
The facts are that banks will make reasonable repairs and financing REO’s using FHA financing is not a problem as long as wording in offer is designed to accommodate this type of purchase. The misconceptions most likely stem from the fact that many agents just haven’t sold many of these properties.
I just looked over my list of REO sales over the last year and out of the 9 bank owned homes that were purchased by buyers I worked with we were able to get repairs on 8 of them. And not just small stuff either. Repairs included.
- 3 of the homes had new roofs installed
- 8 received section 1 pest clearance
- 3 homes had some windows replaced
- 2 homes had new stove/ovens installed
As for financing
- 8 were purchased using FHA financing.
- 2 homes were purchased using a blend of FHA and City of Redding DAP
- 1 home was conventional financing combined with City of Redding DAP
First time buyers shouldn’t be afraid to consider REO’s when looking at homes. After all, it’s where the best deals are.
