Would you buy a house during the winter? Are you prepared to slog through feet of snow and slide around on sheets of ice looking for a new place to hang your hat? Are you willing to move your family’s belongings into a new place when temperatures are freezing outside? Doesn’t sound too fun, does it? What if buying a house in cold, hard weather translated into saving some cold, hard cash? According to a Realtor.com survey of over 1,300 prospective winter home buyers, there are plenty of reasons why it makes sense.
In this post-2008-financial-meltdown world of ours, buying a home that the owner wasn’t able to pay for anymore has become a lot more common, and so have all of the different terms and options related to those sales: short sale, foreclosure, deed in lieu and REO properties.
In this week’s First-Time Home Buyer Q&A Google Hangout, we talk about REO, or real estate-owned, properties – specifically how to buy one that is owned by the Department of Veterans Affairs (VA). But let’s take a step back first and look at what an REO home is.
What Does REO Mean?
REO refers to a home that the homeowner lost in foreclosure. If the lender who foreclosed on the home can’t sell the property at a foreclosure auction, then the lender takes over ownership of the home. The lender then tries to sell the real estate-owned property to minimize their losses.
Buying an REO home can be a good idea because they’re usually priced low because the lender wants a hassle-free process and hopes to create some competition between buyers. However, these types of homes often need repairs, and the lender usually won’t pay for any of the work because they don’t want to spend any more money than they already have on the home. So, you can get it for a lower price, but you might have to spend a lot of money fixing up the home.
Buying an REO Home
Because you’re dealing with an institution and a property that was taken in foreclosure, it can be more of a hassle to buy an REO home than one owned by an individual, and that’s what we cover in this first-time home buyer video segment. Someone was having trouble buying a home that was taken over by the VA and asked how to proceed. Mark Connors, lender liaison for the VA Loan Guaranty, says that if you’re having trouble, or just have questions when trying to purchase a VA REO property, you can contact him at Mark.Connors@VA.gov.
You can also watch the video here!