Buyers Must Be Cautious When Purchasing REO Property

I get calls everyday from prospective home buyers who tell me they want a "great deal". I often ask them to describe a "great deal". The answers to that question are varied. Because, a "great deal" means different things to different people, many buyers have unrealistic expectations of obtaining a "great deal" and based on their answers, in spite of a repressed market will probably never make a purchase.

Often, prospective buyers believe that their answer to a "great deal" is to find a foreclosure, short sale, HUD or REO (Real Estate Owned By A Bank) property. For some buyers this is a great opportunity, however, for many buyers this route to home ownership is very challenging and in the end may not be the "great deal" they anticipated. When looking for foreclosure and short sale properties it is important that you have a good Realtor working for you who is experienced with dealing with the foreclosure banks. You need a Realtor who will look out for your best interests.

Bargain-hunting Buyers looking to find a great deal in this market often go after foreclosure property. They find a home that fits their needs, and together with their real estate agent they produce and submit the offer for the home. The offer is then reviewed by the Seller, and if the Seller selects the offer, CONGRATULATIONS! – but don't get too excited, the offer is Acknowledged but not officially Accepted.

In order for the offer to be Officially Accepted, the Buyer needs to agree to a few Addenda. These Addenda can be scary, as they just about give the Seller all the rights and leave the buyer with none. Unfortunately, often times Buyers must agree to this Addenda before the Seller will proceed with the sale of the property. It is under their terms, and Buyers need to understand that the Addenda can CONTROL the entire agreement. It is always BUYER BEWARE when dealing with foreclosures and short sale transactions.

These addenda are very comprehensive, and can be overwhelming as they are filled with unfamiliar terms. Moreover, this Addenda may appear to be a whole new Purchase Agreement in itself which specifies terms & conditions set forth in the purchase transaction. This is because the Addendas purpose is to protect the Seller, therefore, it overrides almost all of the language in the original Georgia Association of Realtors (GAR) form offer that was originally submitted.

Executing these instruments while obligatory, should not be taken lightly. As a Buyer it is extremely imperative that these documents are carefully read and fully understood before moving forward with the purchase. All things considered, with the correct professionals in place to help you through the process, the purchase can still be a bargain for the savvy buyer!

Sara Hibbard is a licensed Realtor in the state of Georgia. One of her many specialties is working with foreclosure, short sale, HUD and REO properties. Sara holds the REOS certification. Sara can be reached anytime to discuss your many questions regarding the real estate market in general or specifics regarding the buying / selling process. Call Sara at 770-399-8108 TODAY!