Thinking of Buying an REO Property? Be careful out there.

We are guaranteed to get at least two calls a month asking us about REO properties. These are properties that are still in foreclosure or have been acquired by a bank following foreclosure.

The common theme of these inquiries is this- "I have seen this property and am interested in buying it. I know it's in foreclosure or it just came out of foreclosure. I think it's a good deal for an investment, what should I do?"

When a property is still in foreclosure and there is no chance of negotiating a contract with the owner and a short sale with the lender, we often recommend that the hopeful investor under-stand the market values in the neighborhood before committing to bid. We tell them to not spend a lot of money in searching the title at that point, but to get an idea of the upset price by calling the tax collector and the attorney for the foreclosing lender for amounts owed to them.

Once they bid successfully, we are in a position to search the title thoroughly in order to insure the buyer's title. But this is only one side of the equation when making the plunge into investing in REO.

Realty Times has a timely article written by Kenneth R. Harney that discusses the pitfalls faced by many investors. Harney assessed the situation as follows:

Foreclosures and bank REOs are pulling a new wave of novice investors into the market, some of whom "are just plain clueless, to put it bluntly," says Robert Cain, a long-time rental market and real estate management specialist based near Tucson, Arizona.

"They see the price and they way, wow! I can buy that house and turn it into a rental," says Cain, who lectures around the country and online about investing intelligently.

"But they don't understand the local market, they don't understand landlording, and don't even necessarily visit the property," Cain said in an interview last week with Realty Times.

So, before you leap into the sea of foreclosed and REO properties, read the full Realty Times article, Investor Report: Investment Buying Tips.

For your next title order
or if you have questions about what you see here,

contact Stephen M. Flatow
Vested Title Inc.
648 Newark Avenue, P.O. Box 6453, Jersey City, NJ 07306
Tel 201-656-9220 - Fax 201-656-4506
E-mail vti@vested.com - www.vested.com

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