If you have been considering buying some investment property or can go with a conventional loan then online auctions are a good way to get incredible deals on homes that have been foreclosed on and now are sitting in the banks inventory as REO’s. A home, once it has gone to the courthouse steps has gone through the foreclosure process and now is an REO-Real Estate Owned. Over the past few years the traditional way for banks to sell off their REO inventory was to hire an agent located in the subject market area to list and sell the REO. Times have have changed…Online auctioning allows the bank to sell and close quickly…in 30 days.. lower their inventory and purchasers to obtain homes quickly and for less money…Now that’s a win win situation…A deal is not a deal unless it’s a WIN-WIN.right!!
Myth 1: All the on line auction homes are in terrible condition: Not so…the house may need some carpet and fresh paint. Maybe the appliances are missing and this fact alone disqualifies the house from traditional financing..FHA or state and local programs.
Myth 2: You can’t have a home inspection: In the state of Virginia and most states it is your right to have a home inspection and most on line auctions allow for this..in fact they openly encourage a home inspection for the purchaser and are quite flexible on time frames to complete a home inspection.
Myth 3: Help…I don’t know what I am getting into: Hubzu and many other online auction companies put a copy of their contract on their site….you can read and print it…making the house buying process very transparent!
Best practices for buying an REO online!
Visit the home(s) you are interested in bidding on and have a Realtor pull comparables from that neighborhood or area….know your values before you buy
Don’t get attached to the property…You may find there are several bids for that property. Things can get quickly out of hand and you could find yourself bidding higher than you are comfortable with.
Paperwork!! If you are purchasing using a conventional loan..get pre approved. 30 days from acceptance to close is not long and you could find yourself being charged a fee for going over the close date.
Closing Attorneys or Title Companies….Using the sellers closing agent may seem like a good idea as they offer Title Insurance@ not cost to the purchaser. NEVER use the sellers closing company…Find a title company of your choice but make sure they have closed a few online auction purchases. This one tip saved a client of mine thousands of dollars and a lot of headaches on re-selling theproperty.
I am always happy to answer questions or concerns about purchasing homes on line….Please feel free to call me 540-850-2007
Hilary Johnson, Realtor
A-REO, ABR, CPM
Keller Williams
302 Westwood Office Park
Fredericksburg VA 22401
Licensed In The State Of Virginia
http://www.gohomeinva.kwrealty.com
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