Helping Buyers Capitalize on Today's REO/Bank-Owned Inventory

Even in these unprecedented market conditions, there are significant opportunities for buyers to take advantage of the REO/Bank-Owned inventory in the real estate marketplace. In September of 2008, 38% of the homes sold in Alameda County had previously been foreclosed upon and it goes without saying that a good portion of those homes were in “less-than-perfect” condition requiring moderate to extensive renovation.

The good news with today’s REO/Bank-Owned inventory is many “less-than-perfect” listings are being offered at substantially discounted prices. However, there are a couple of main challenges buyers may face on such listings:

• Buyers may love the house and the neighborhood but they can’t afford to make the needed repairs on the home after close so they walk from the deal, or

• Underwriters are denying loans on sub-standard condition properties and/or sellers unwilling or unable to do "subject to" repairs prior to close

Sound familiar? Well, many buyers are finding that Renovation Financing is a great solution for these challenges. In a nutshell, renovation financing is a single loan transaction that:

1. Allows a buyer to purchase a property regardless of it’s current condition (even if it’s red-tagged)
2. Provides funds for renovation, repairs and/or upgrades
3. Allows repairs ranging from major to cosmetic
4. Uses after-renovated value to determine loan amount

This type of financing enables the owner-occupant homebuyer to come in with as little as 3% down (FHA profile buyers) or the "for sale" investor (up to an 80% loan-to-value) to purchase the property, renovate and sell or hold for investment. Sellers and real estate commissions are paid at the close of escrow before the renovation work begins. With Renovation Financing enabling a wide range of home improvements from basic repairs to extensive upgrades, buyers can transform any home into their own custom home or increase their investment value for turn-around profit.

At NurtureSource Designs, we can help your homebuyers purchasing REO properties to envision the full range of possibilities achievable through re-design and renovation. Our local business resources allow us to recommend qualified, local general contractors, licensed tradesmen such as painters, floor installers, landscapers and others. Additionally, for buyers planning eco-green renovations, our "Green & Beautiful" design service utilizes eco-green products such as non-VOC paints, sustainable flooring materials, retrofitted radiant-floor heating, PV solar panels, native plant landscaping, etc., for creating healthier and more cost-efficient homes. Call us to discuss your requirements and let us help.