question on REO home- my brother is buying one

[robbase]

well my brother is buying a REO- pros? cons? things to look out for?

Apparently he is blowing off the home inspection (he is having one done, but is just not planning to be there for it)

other thoughts?

thanks

[Deleted]

Is he an experienced rehabber or planning on tearing down the house? If not he's really short changing himself with the home inspection. Good inspectors will give you a lot of verbal tips that will not go into a written report. The reason is that in many states the report becomes a matter of public record so a good inspector might recognize signs of settlement, water damage, not to code work and they will simply note "seek professional advice for x". Some electrical work is really easy and cheap to fix but you'll get the same kind of comment.

REOs are typically sold "as is" You can read the recent thread about buying from an estate and get some tips. Perhaps the only other additional info is that banks can take forever to make a decision to approval a sale. So he should keep looking while he's waiting to hear from the bank and needs to make sure his contract allows him to back out if he finds something else before he hears back from the bank.

[2kids10horses]

Some houses are in better condition than others. If the house appears to be in excellent condition, I don't think he has to be there witht the inspection. If it's an older house, been added onto, has "issues", then being there for the inspector is more important.

Each bank is different. Some reply quickly to offers, some drag their feet.

Local banks usually respond quicker than Freddy/Fannie, but even then, it shouldn't take too long unless there are "multiple offers".

The way to get the best deal is to have cash. Barring that, get pre-approved (not just qualified) for the loan.

The bank generally is not interested in making repairs. If any repairs are needed, plan on having that done after the closing, and adjust your offer accordingly.

When I buy REO (and I buy 3 or 4 a year) I offer ALL CASH, NO CONTINGENCIES. Of course, I don't offer full price! I do, however, get screaming deals! (Usually the listing agent will tell me something like, "Gee, I didn't think they would take that!")

[brdsl]

2kids,

It might be dependent on the area. I have made multiple offers, and have been told multiple times cash/loan doesn't matter.

Here, homes are listed MLS after foreclosure. I guess if you have the inside to deal directly with the bank, it may work.

[robbase]

my brother is not handy at all, he has lived in a small apartment most of his life, this is his first home purchase