REO properties are real estate owned properties; the owner of the property is a bank. Deals are out there, even in the current real estate market. Before you sign on the dotted line, however, you'll need to know exactly what you are getting in an REO purchase.
Whether looking for a residence or an investment, in Minneapolis proper or the suburbs, take the old "buyer beware" warning seriously. Banks usually acquire these properties because the minimum bid for it was not made at a public auction. This works in the buyer's favor because banks are not in the business of owning property. They want it off their books as quickly as possible.
Most REO properties are offered "as is." What you see is what you get. That doesn't mean you should forego a home inspection; not if you are a smart consumer or investor. Banks may or may not provide a home inspection. It is not required by law and there is no incentive for them to do so.
Some homes that have been foreclosed and abandoned are left in a deplorable state. In some cases wiring and plumbing may have been ripped out; walls have been punched out; fixtures and appliances are long gone; and graffiti may adorn the walls, floors and ceilings. Those are the immediate visible damages that may face a new buyer.
A home inpsection can
discover many of the hidden problems. A home inspection in Minneapolis runs between $350 to $450, depending on the size of the building. Even if a property looks pristine, other things may account for thousands of dollars in repairs to the home before it is ready for move in. What if there are structural issues that are not apparent? Mold, infestation, dry rot and water damage are among the really expensive issues that may come along with the bargain price. These are the issues you need to know about before you buy. That's the purpose of a home inspection.
During the home inspection period you and your agent should also take the time to re-verify zoning, check for any vacant building registration fees, check for city code compliance orders and verify the property is not condemned. The last thing you want as a buyer is to discover unsuspected costs that may run too high when it is too late. Cover your tracks carefully so you are sure not to buy a property that drains your pocket book.
There are two ways to think about a home inspection. If the building is in good shape, it gives peace of mind. If there are problems with it that you can't overcome then you can always walk away from the deal, get your earnest money deposit back and continue the search.
Author Resource:-
Kevin Curtis is a licensed agent with RE/MAX Advantage Plus. He is The Minnesota Real Estate Team's 2007 Agent of the Year. Kevin and his team provide great service and ongoing insights into the Minnesota Real Estate market at
MinnesotaPropertiesOnline.com.
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