They finally made it to the Northwest; REO’s are here and we will likely see more of them in the next two years. On May 4th, the Today show mentioned that Seattle, Washington was listed as the 4th city in the U.S. to recover from the housing mess stemmed by the mortgage mess. There were several factors and one of them was the prevelency of foreclosures.
The cycle begins when homes go into short sale; to foreclosure, to REO (bank-owned property). With lots of short sales, pre-forclosures, forclosures, bank-owned properties for sale; this inevidably brings down property values and makes it hard for the regular property owners and builder/developers to sell for a profit, which then starts the cycle again beginning with short sales…
Of course, many people are looking for deals in today’s buyers’ market and are focusing on these types of property, but they may not be educated to the fact that short sales can take up to five months just to get bank approval for the proposed sale price. In addition, REO property asks buyers for their highest and best offer (no escalation clauses here) and can receive up to 50 offers on just one property. A buyer for these properties is likely an investor without vested emotions or a potential homeowner with lots of patience and an affinity for competition.
