How to Buy Foreclosed Properties From a Lender

Buying a lender-owned property can be easier than you think.

When a lender forecloses on a property and it does not sell at auction, the ownership of the property reverts back to the bank. At this point the bank will list the property for sale and make it available to the local real estate market.

Real Estate Agent Participation

Lenders will hire representation from a local real estate brokerage. Negotiating with the lender will require the use of its agent or hiring an agent to represent you as the buyer. Lenders will not sell a real estate owned (REO) property directly to an individual without the use of an intermediary.

Offer and Acceptance

The process of making an offer and obtaining acceptance from a lender is no different than any other real estate transaction. The buyer presents an offer and the lender will typically counter. This will continue until acceptable terms have been reached by both parties.

Property Condition

When purchasing a property from a lender, the property is sold "as is," meaning that the lender will not make repairs to the property and no warranties are expressed or applied to the property condition.

References

• Home Path: Resources
• HUD: About Buying HUD Homes
• Real Estate ABC: REO-Buying Bank Owned Real Estate