Before you decide to purchase a foreclosed property, it helps to educate yourself so you have realistic expectations.
What are foreclosed properties?
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A foreclosed property – also known as Real Estate Owned (REO) – is a home that was once customer-owned
but has been turned back to the mortgage holder as the result of a foreclosure action or acceptance of
a deed-in-lieu of foreclosure.
A foreclosure can occur when mortgage payments are not made over a period of time and efforts to
resolve the default are unsuccessful. While we make every effort to help customers remain in their
homes, sometimes foreclosure becomes the only option.
Revitalizing neighborhoods and communities is our goal, which is accomplished when REO properties
are purchased by buyers who will occupy them as their primary residence.
Are properties sold at a discount?
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Properties are listed at fair market value. We work with local real estate agents to review
similar listings for price comparisons, assess the property condition, and set an accurate price.
Making properties attractive to buyers is important to us, so we make every effort to maintain and prepare
homes for sale, making repairs as needed.
Do homebuyers have to compete with real estate investors?
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If you plan to live in a property as your main home, you can make an offer during a special time frame
reserved for buyers who will occupy the property as their primary residence. This time period helps buyers
planning to live in a home get their offers considered before buyers seeking investment property. This special
time period is shown by the 
on a listing.
If you’re buying an investment property: Please wait until the
graphic is removed from a listing before
submitting your offer.
Promoting Home Ownership. For the first fifteen days a property is listed, Wells Fargo will only
accept offers from borrowers intending to occupy the property as their primary residence, nonprofits,
or municipalities. For up to five days following a reduction in the list price of a Wells Fargo REO,
only offers from owner occupants will be considered. Interested buyers can sign up for notifications of
listings and/or reductions by visiting http://reo.wellsfargo.com/WBREOSubscription.aspx.
Do I need cash to buy a foreclosed property?
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Myth
Foreclosed properties can only be purchased with cash.
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Truth
On average, approximately 60% of our foreclosed homes purchased are financed.
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You can finance many REO properties through Wells Fargo or a lender of your choice. Home inspections
on foreclosed properties may be required for certain types of financing;
speak with a home mortgage
consultant for additional information.
If you have sufficient cash to buy a home, be sure to determine whether your needs are better
met by using financing or buying with cash.
If you’re thinking about buying a foreclosed property and have enough cash for
the purchase, it’s helpful to evaluate the benefits of your choices.
- A mortgage or home equity financing allow you to maintain access to your cash reserves
for investments, emergencies, and other purposes.
- Financing may provide tax benefits, including the potential to deduct your interest
payments. Consult your tax advisor.
- When you apply for financing, the lender orders services such as appraisals and
inspections. If you are purchasing with cash, you will be responsible for ordering
and scheduling these services.
- If a home needs renovations or repairs, you might consider our
Purchase & RenovateSM loan.
Because the loan amount is based on the home value after improvements are made, you may qualify for more.
- A cash purchase means you won’t have monthly loan payments, and will avoid the interest
expense and closing costs involved with financing.
- You may be able to negotiate a faster closing on your home because you can eliminate the
additional time involved in obtaining financing.
- If you need to access funds after the purchase, you could apply for
home equity financing.
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Our home mortgage consultants can help you to understand your financing options.
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What conditions are the homes in?
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Not all properties need the same level of preparation for sale. However, we often paint, replace
carpeting, and – in some cases – install appliances.
If you’re considering a property that needs renovation, find out about a loan that
combines mortgage and renovation financing.
Finance both your mortgage and home improvements with the Purchase & RenovateSM program for
advantages over other types of financing
- Because improvement costs are included in the loan, you can begin your
renovation efforts immediately after closing.
- Since loan amounts are based on the home value after the improvements are made, you could qualify for more funds
than with other types of improvement loans.
- One loan to purchase a home and make renovations or repairs.
- Conventional or FHA 203(k) loan options.
- Available with a fixed- or adjustable-rate.
- Includes single-family, one-to-four units, planned unit developments,
and condominiums.
- Increased financing potential. Because the loan amount is based on the home value after improvements are made, you may qualify for more.
- Lower monthly payments. Costs are spread throughout the term of the loan, so your monthly payments may be lower than other financing options.
- More choices. Look at properties you wouldn’t otherwise consider.
- Speed. Start improvements right after closing.1
- Tax deductibility. Interest may be tax deductible.2
- Financing may not be available for luxury items, such as a pool, hot tub, or spa.
- Requires hiring a contractor.
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1 Restrictions apply
2 The interest on any portion of credit greater than the fair market value
of your property is not tax deductible for Federal income tax purposes. You
should consult your tax advisor regarding tax deductibility of interest and charges.
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How do I make an offer to purchase property?
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A prequalified mortgage estimate
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Obtain a:
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Proof of cash funds
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If you’re a cash buyer, you don’t need a prequalification letter, but you may
be required to provide proof of funds when you make your offer.
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Sufficient home equity loan or line of credit information
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If you are keeping your current home, you may be able to use your home’s equity to buy a bank-owned home:
Typically, the interest on home-equity financing can be tax deductible. (Speak with your tax
advisor regarding the deductibility of interest.)
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How quickly can I get a response to my offer?
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Typically, we respond to offers in two business days with either an acceptance or a counter-offer.
To streamline the process, promptly submit any additional information or documents the listing agent requests.
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Myth
It can take Wells Fargo
months to negotiate a price on a foreclosed home.
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Truth
On average, Wells Fargo
responds back to an offer on a foreclosed home within 2 business days.
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Answering the following questions before buying a property can help you to be better prepared.
Why are you buying a home?
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- Be sure to think about why you’re purchasing a property. Refining your purchase objective can
help you think through additional purchase considerations.
- You also might want to consider what features you’d like in the home. Consult our
Home Wish Checklist for ideas.
What type of home do you want?
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- Are you looking for a move-in ready home or are you willing to make repairs?
- Some properties require attention to make them move-in ready. We often paint,
replace carpeting, and install appliances before listing a property for sale.
- If you’re interested in a handyman special that needs repairs or remodeling, our
Purchase & RenovateSM loan lets you conveniently combine home improvement costs with a mortgage. Benefits include:
- Increased financing potential. Because your loan amount is based on the home’s
value after improvements are made, you might qualify for more.1
- Lower monthly payments. Renovation costs are spread throughout the entire loan term,
so your monthly payments may be lower than other financing options.
- Speed. You can begin improvements right after closing.1
- Tax deductibility. Interest may be tax deductible (Consult your tax advisor on the deductibility
of interest).2
What's your budget for home repair and remodeling?
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- Talk to a knowledgeable REALTOR®to research recent sale prices of local houses.
- Get an estimate of improvements. Search the internet for information about home improvement costs for your region
of the country, as these numbers vary.
- Add your improvements to the estimated value of your home to make sure you don’t over-improve. When it is time
to sell, it will be easier to recoup your costs if your home is comparable in price to other properties in your
neighborhood.
- Consider how long you intend to live in a home, the time and effort required for your renovation, the
availability of other homes in the area, and where you’ll live during the improvements, if necessary.
You can find our REO properties with the
property search page. It lets you:
- View listings within a state by the desired city or county.
- Search within a price range, and for the desired number of bedrooms and bathrooms.
- See property descriptions and photographs.
- Contact the listing agent for additional details or to arrange to view the property.
Find out whenever new properties meet your search criteria or prices change. Here’s how to sign up:
- Go to the REO Subscription Service page and select Subscribe.
- Enter your name and register your email address.
- Specify your property search criteria, including city, state, and other desired property details.
You can set up multiple property searches and receive new home updates in one daily email.
- To change your search criteria, enter your log in information.
- To get contact information for a listing agent or mortgage consultant, view the property details page.
How do I estimate what I might want to borrow?
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We provide two ways to find out how much you may be able to borrow:
- A free mortgage prequalification lets you know roughly how much you can borrow,
based on basic financial data your provide.3
- A preapproval letter tells a REALTOR® and seller that you’ve been preapproved for
a specific amount based on a preliminary review of your credit information.4
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Neither a preapproval nor a prequalification obligates you to borrow from Wells Fargo.
How can I benefit from a preapproval?
- You can identify and address possible qualification problems early in the homebuying process.
- Obtaining a PriorityBuyer® preapproval tells real estate
agents and home sellers that you have been preapproved for a specific mortgage amount.4
Real estate agents and sellers increasingly rely on preapproval to identify serious offers.
- May provide an advantage over buyers who are not preapproved.
- Adds to your negotiating strength when you are ready to make an offer on a home.
- Lets you shop confidently because you know how much you may be able to borrow.
- May allow for a faster closing, since much of the loan work is already completed.
How does the process work?
- If you’re still in the early stages of house hunting and want to know roughly about how much home
you can buy, request a free mortgage prequalification.3
- If you’re ready to move forward, line up your financing ahead of time with a PriorityBuyer® preapproval,
which requires a credit check and a completed mortgage application.4
Have questions or need help? We’re ready to help you through the home financing
process. Work with us online, over the phone, or in person with a local consultant.
View your loan options.
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How can I finance repairs or improvements?
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If you want to make repairs or improvements to a property you’re buying, consider combining your home
improvement costs with your mortgage.
The benefits of consolidating these expenses with our
Purchase & RenovateSM loan include:
- Increased financial potential. Because your loan amount is based on the home’s
value after improvements are made, you might qualify for more.1
- Lower monthly payments. Renovation costs are spread throughout the entire loan term,
so your monthly payments may be lower than other financing options.
- Speed. You can begin improvements right after closing.1
- Tax deductibility. Interest may be tax deductible (Consult your tax advisor
on the deductibility of interest).2
Learn how we’re helping to stabilize communities on our
Community and Homeowner Support page.
For your financing needs:
1-800-541-2023
See Hours >
Home Mortgage:
Mon – Fri: 7 am – 9 pm
Sat: 8 am – 6:00 pm
Sun: 10 am – 6:00 pm
Central Time
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Please submit all offers to the listing broker/agent. To report any concerns with a listing broker/agent, or to report any property condition or other concern needing escalation (including concerns related to a previously submitted offer), please call:
1-877-617-5274
See Hours >
Premiere Asset Services:
Mon – Fri: 7 am – 8 pm
Central Time
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1 Restrictions apply.
2 The interest on any portion of credit greater than the fair market value of your property is not tax deductible for Federal income tax purposes. You should consult your tax adviser regarding tax deductibility of interest and charges.
3 A prequalification lets you estimate how much you can borrow to buy a home, does not require a credit check, and is not a commitment to lend.
4 A PriorityBuyer® preapproval is based on our preliminary review of credit information only and is not a commitment to lend. We will be able to offer a loan commitment upon verification of application information, satisfying all underwriting requirements and conditions, and providing an acceptable property, appraisal, and title report. Not available on nonconforming products, not available in all areas.