A Real Estate Owned (REO) property is a piece of property that has been taken back by lenders and banks after a foreclosure. More of these properties became available after the real estate market fell a few years ago, and if you are lucky enough to acquire a piece of property this way, you can get the bargain of a lifetime. Follow these tips to make your dreams of home ownership on Kauai come true without a nightmarish price tag.
To purchase a REO property in Hawaii, you first must contact a real estate agent, preferably one who specializes in REOs. These agents work with lending institutions to find the REOs available for sale, and then match the properties with the right investor. Of late, the short sale listings are controlling the market in Kauai, so the REO listings are become more valuable. A good Realtor can keep their ear to the ground and notify you when there's a new listing that would meet your needs.
Your Realtor can also advise you when it comes to negotiating for your piece of real estate. Over-extending yourself is never a good idea; don't let yourself think that you must have a certain piece of property, no matter the cost. There's always another deal around the corner, and it's probably more affordable. Remember, the previous owner made the error of biting off more than he could chew--don't make the same mistake yourself! An able broker can also help you handle a bidding war. The agent can keep you grounded about the actual worth of the property, keeping you from getting carried away with the bidding frenzy.
If you're eager to get your offer accepted immediately, you should be sure to avoid making a low-ball offer, unless the property has been sitting stagnant for over three months or has serious issues like code violations, non-permitted structures, code violations, or outstanding permits. The financial institutions that are trying to sell the property want to get a good price just as you do, so don't get too low unless you want to be rejected out of hand.
If you're buying the real estate in order to flip it, be sure to come up with a plan to get it off your hands. Flipping a house isn't your best investment in Kauai, as the real estate market is rather competitive. If you do choose to go this route, do the rehabilitation work very quickly and stick to your budget. Getting it back on the market as quickly as possible is your best bet, and get it sold with the Realtor who helped you to acquire it.