San Diego foreclosuresWith every real estate sale, there are common listings issues to be aware of. If they all started with a sign that said, “Beware—Common REO Problems Ahead”, you could probably avoid many of them. Here’s your sign.

History of the Property

If you haven’t had any personal dealings with the property itself before, then you need to talk about this with the current owner or the bank. Find out if there have been any liens on the property and if any amounts are still owed. Ask them if there are any persistent problems that have not been corrected. Hiring an inspector is a good idea as well, but you should be aware of previous inspection reports at the same time. This will help you understand what you’re purchasing and what the potential profit margins are going to be.

Understanding the Sale Contract

Most of the time, a seller is not going to add in a real estate contracts provision to correct whatever is currently wrong. It is your responsibility as the buyer to hire and inspector and make yourself aware of all the problems. This is done by asking questions and bringing in foreclosure professionals. However, make sure you do all of this before you sign any REO contracts. Once your name is on the dotted line, they are no longer held financially responsible for anything that is missing. That’s why you may want to get a professional from your financial institution to come in and help you evaluate the property. They know what to look for and also what is typically going to be the responsibility of any buyer.

Clear the Title or Deed

While it might sound like an obvious step, you need to make sure the person selling the property actually has the right to do so. If there are liens on the location that are still owed, they may not be free and clear to sell to whomever they wish. If you move ahead with the sale and these issues have not been dealt with, you’ll be the one to suffer financially. To resolve any lasting questions, set up real estate negotiations with the seller and the bank representative to find out what exactly is going on and what the current state of the title is.

As long as you are aware of these potential real estate problems before you foreclosure foreclosure

begin, you’ll have a better experience purchasing REO properties. Then, you won’t need a warning sign; you’ll already be ahead of the game.

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This is filed under Foreclosures.

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