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What you need to know

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 calendar image on a listing.

If you’re buying an investment property: Please wait until the calendar image 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.

Do I need cash to buy a foreclosed property?
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Foreclosed properties can only be purchased with cash.
On average, approximately 60% of our foreclosed homes purchased are financed.
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.

Our home mortgage consultants can help you to understand your financing options.

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.

How do I make an offer to purchase property?
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A prequalified mortgage estimate Preapproval or Prequalification:
  • Buyers must submit a prequalification letter from Wells Fargo or any other lender. If Wells Fargo is chosen, the prequalification letter may be requested from a Home Mortgage Consultant or by going online at Letters obtained from Wells Fargo are provided at no cost to the buyer.
Proof of cash funds 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.
Sufficient home equity loan or line of credit information 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.)

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.
It can take Wells Fargo
months to negotiate a price on a foreclosed home.

On average, Wells Fargo
responds back to an offer on a foreclosed home within 2 business days.
What should I consider before buying a foreclosed property?

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.

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.
  • 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
Ability to Borrow
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.

Learn how we’re helping to stabilize communities on our Community and Homeowner Support page.

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:
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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 information provided and limited 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 property acceptability and eligibility, including appraisal and title report. Preapprovals are subject to change or cancellation if a requested loan no longer meets applicable regulatory requirements. Preapprovals are not available on all products. See a home mortgage consultant for details.
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