There are some desperate sellers out there, but perhaps none so desperate as banks. That's right - banks that own foreclosed properties are anxious to get them off their hands. After all, their business is lending, not property management.
If you are pondering the purchase of such an "REO," or Real Estate Owned property, how do you find one, and then determine if it's the right buy for you? Banks work almost exclusively with real estate professionals, so your best bet is to begin your search at your trusted local agent's office.
Chances are the broker will have a list of REOs to suit your needs and budget. While banks don't usually price these properties much above what they're willing to finally accept, lower offers on these listings stand an excellent chance for consideration.
Look for houses that have been listed for more than 90 days, and offer somewhere between ten to twenty percent below the asking price. However, do be aware of potential hidden costs associated with foreclosed properties.
Owners who vacate a foreclosed home may have left plenty behind in need of repair. Be sure to perform a thorough inspection - with electrical and gas systems operating - and ask your real estate representative to factor repair costs into your offer. If you're smart, it's a real buyer's market, but only if you buy!