Buying An REO In Las Vegas

REO stands for Real Estate Owned….by the bank. REO’s are determining many aspects of today’s real estate market in Las Vegas as they are a major part of our market. Any prudent buyer cannot overlook these properties. Many buyers and buyers’ agents need to know what to expect when purchasing REO’s.

First, buyers and their agents need to know that these properties are sold “As-Is.” When I used to work for one of the nation’s largest REO brokers, I negotiated with many buyers’ agents who did not understand this. We need to understand that the banks have usually already considered the necessary repairs or have had repairs made prior to pricing the property. The banks’ agents should have already advised the banks about the obvious condition of the property and how it stacks up against comparables. If buyers are concerned about repairs, they should bring a contractor prior to making an offer. The buyers should consider the contractor’s estimate and make educated and fair offers.

Secondly, know that the process will be different than when buying from an owner that is not a bank. After an offer is accepted, banks will usually issue an addendum or contact that the banks draft. Buyers need to read and understand everything on the addendum and ask their real estate professional for help if anything is unclear. In Nevada, a waiver will also need to be signed by the buyer releasing the bank from knowing the “normal” seller’s disclosures. Buyers should know that this is legal because the bank has never lived in the home and therefore, they do not know of all the negative aspects and details of the home that a normal owner/seller would be legally obligated to disclose. Buyers should take advantage of their due diligence period and have inspections completed as soon as they have an accepted offer. Agents should make sure that all the utilities are on once their buyers are accepted so that inspections can be completed. Buyers should also be aware that if items are stolen from the property during escrow, the banks will most likely not replace them. Agents need to protect buyers concerning this once an offer is submitted. Escrow will usually also be decided by the seller.

Lastly, agreed upon timelines are very strict. Even though it may seem like the bank takes their time on their end, know that they are working as hard and as fast as they can. They are dealing with multiple properties, and if the buyer slacks, many times the seller will cancel the sale due to the buyers’ non-performance. Agents should make sure everything on the buyers’ sides are being completed timely.

Buyers, please choose an agent who is competent in today’s market. Agents, if you lack the experience, please take some classes so that you can help your buyers.