Foreclosed REO – How to Investigate

A buyer in SC once asked me my opinion on a home that was going up for auction. The balance owed was $47k and the current market analysis valued the property at $140k. A Foreclosed REO – How to Investigate.

The problem was, there was no inspection allowed and occupied.

FORECLOSURED REO
REO Occupied – the seller does not represent or guarantee occupancy status. NO VIEWINGS of this property. Please DO NOT DISTURB the occupant.

“As is” cash only sale with no contingencies or inspections. Buyer will be responsible for obtaining possession of the property upon closing.

The property is a Residential Single Family property with 4 bedroom(s) and 2.0 bathroom(s), 3/4 acre, built in 1984 and is 3117 square feet.  10 miles from Florence, SC.

This was my reply…

• Go talk to the occupants…or send somebody to talk to the occupants if you wish to remain anonymous; Pay them for an inspection if you need to, or tell them you’ll help with their relocation if they help you understand the issues with the property (if any).
• Go talk to the neighbors; they usually know a lot.
• Call the city and see if there are any red tags (or flags).
• Check to see if the house was listed on MLS. If it was you may get some good info there. Talk to the ex-listing agent.
• See what they know about the condition of the property.
• See if either are interested in buying the house.

It’s a gamble, but, if the low side market value of  this foreclosed REO of $140k is correct….there’s plenty of room to handle a variety problems.

You could hedge your bet by getting information for sources in the know. 

Stay Tuned for the update on this property case study…my student bought it!

–Mitch–