Sedona AZ Real Estate
What Is An REO? Real Estate Owned Properties
Millions of homeowners found that their homes were heading towards negative equity after the 2007 housing market crash. Despite interest rates falling to historic low levels, many homeowners went bankrupt and couldn't afford to pay their mortgage payments. This was especially true for first-time buyers.
Lenders would often have to seize the property and repossess it after the homeowner stopped making monthly payments. This led to foreclosure. This meant that Realtor Sedona thousands of American homes became REO (real estate owned). There are a lot of great properties for investors and new home buyers.
Is it harder to buy a seized home than it is to buy a well-maintained and loved-in regular house? Potential home buyers are more likely to avoid REO properties due to the many negative aspects that can scare potential homeowners.
REO homes can be found in disrepair with Bank owned property mowed lawns, boards up windows, and utility services like electric and gas not working. Potential buyers will be scared if the amount owed on the house is higher than the market value. This is not always true. Some REO properties can be sold at ridiculously low prices. Even if some maintenance work is required (as it often is), then the property still represents a good value.
Lenders should not hold onto the property for its asset value. Therefore, selling the house is often an option. It is a win-win scenario for buyers. But how did a home get to this point?
If the homeowner is unable to pay the mortgage on time, the home becomes in distress. If more than three payments are not made, foreclosure proceedings can begin. Next, the equity must be determined. To do this we need a Broker's price opinion (BPO), or an appraisal.
