Repo properties come in all shapes and sizes. There are government-owned repos. There are investor-owned repo properties. And then there are bank-owned repos. Lenders, creditors and government agencies sell repo properties using one of the following methods:
One of the easiest and most convenient ways to buy repo home foreclosures is online. RealtyTrac, for example, maintains the nation’s most extensive national database, with thousands of repo properties that you can browse from the comfort of your home.
Real Estate Agents
After a lender repossesses a property, it hires a real estate agent to market and sell the repossessed home on the open market. Agents post the repo property on the Multiple Listing Service (MLS) and the sale is like a traditional real estate transaction.
If the real estate broker does not sell the home on the open market, lenders, creditors and government agencies sometimes hire professional auction firms to sell repo properties. Increasingly, foreclosures are being sold at public auctions across the county. As the number of repossessed homes grows, more and more banks, creditors and government agencies are hiring auction companies to sell thousands of repo properties. Auction companies hold huge auctions, sometimes selling hundreds of homes in a single day. While many experts agree that auction companies often get higher prices due to the auction frenzy created among its bidders, sometimes homebuyers can find a bargain in their inventory.
Directly from the Bank
Many homebuyers and investors go directly to the lender and make an offer. Simply go to RealtyTrac and search under “Bank-Owned” properties.
Asset Management Companies
Some lenders hire outside asset management companies to handle their foreclosure inventory on the lender’s behalf. Wells Fargo, for example, hires Premiere Asset Management to sell their REO foreclosure properties. There are a handful of asset management companies that handle thousands of bank-owned repos.
There are also great real estate deals on government-owned repos. Thousands of properties are being sold by government lenders because homeowners have defaulted on their mortgage payments or property taxes. The government repossesses thousands of homes every year. Investors and homebuyers can purchase government repo properties at auction from national and local government agencies.
Several federal agencies have repossessed homes to sell. The Department of Veterans Affairs, which is a government agency that provides home loans to veterans, offers some of the best opportunities to purchases discounted repo properties. Buyers do not have to be a veteran to purchase VA repo properties. Another advantage to buying VA repo properties is that they often cost less than other properties. To further encourage investors’ interest in VA repo properties, the VA will often offer special financing deals. For example, buyers can purchase VA repo properties with little or no money down.
Besides VA repo properties, homebuyers and investors can also find top-notch deals on repossessed property owned by the U.S. Department of Housing and Urban Development — known as HUD. The Department of Housing and Urban Development sells both single family homes and multifamily properties. Most HUD repos are initially offered on a priority basis to owner occupant purchasers (people who are buying the home as their primary residence). Following the priority period, unsold properties are then available to all buyers, including investors. Buyers who are interested in purchasing HUD repo properties need to contact a real estate agent who is authorized to sell HUD homes. Brokers and real estate agents that are authorized to sell HUD repos can submit written offers for buyers.
Other federal government agencies that sell repo properties include the Internal Revenue Service (IRS), the Small Business Administration (SBA), the U.S. Customs and the U.S. Marshalls Service and the Department of Agriculture. Each government agency lists their repo properties on their websites.
Visit Foreclosure Center
Visit our Foreclosure Center to read more detailed information about foreclosures.