Savvy consumers will turn to a seasoned pro when considering the purchase of a foreclosed property. For more information, just contact me through my site or e-mail me. I'm glad to address questions you have about real estate foreclosures.
What is an REO?
"REO" or Real Estate Owned are homes which have been foreclosed upon that the bank or mortgage company now holds. This differs from real estate up for foreclosure auction.
When buying a property during a foreclosure sale, you must pay at least the loan balance plus any interest and other fees accumulated during the foreclosure process. The buyer must also be able to pay with cash in hand. And on top of all that, you'll accept the property completely as is. That possibly will include standing liens and even current tenants that need to be removed.
A bank-owned property, on the other hand, is a much cleaner and attractive proposition. The REO property did not find a buyer during foreclosure auction. The bank now owns it. The lender will attend to the elimination of tax liens, evict occupants if needed and generally prepare for the issuance of a title insurance policy to the buyer at closing.
Take notice that REOs may be exempt from normal disclosure requirements. For instance, in California, banks are exempt from giving a Transfer Disclosure Statement, a document that ordinarily requires sellers to disclose any defects they are informed of. By hiring Jeffrey Clee, Broker Associate, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Is REO property in Stuart a bargain?
It is frequently assumed that any REO must be a good deal and an opportunity for guaranteed profit. This frequently isn't true. You have to be prudent about buying a repossession if your intent is make money. Even though the bank is typically anxious to offload it promptly, they are also motivated to get as much as they can for it.
When pondering the value of a foreclosure, carefully analyze comparable sales in the neighborhood and be sure to take into account the time and cost of any repairs or remodeling needed to prepare the house for resale. There are bargains with potential to make money, and many people do very well buying foreclosures. However there are also many REOs that are not good buys and not likely to turn a profit.
All set to make an offer?
Most mortgage companies have staff dedicated to REO that you'll work with in buying REO property from them. To get their properties advertised on the local MLS, the lender will often hire a listing agent.
Before making your offer, you'll want to contact either the listing agent or REO department at the bank and discover as much as you can about their knowledge concerning the condition of the property and what their process is for receiving offers. Since banks almost always sell REO properties "as is", it's often prudent to include an inspection contingency in your offer that gives you time to check for unknown damage and terminate the offer if you find it. If, as a buyer, you can provide documentation showing your ability to pay, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This holds for any type of real estate offer.)
Once you've presented your offer, it's customary for the bank to make a counter offer. From there it will be your decision whether to accept their counter, or offer a counter to the counter offer. Be aware, you'll be working with a process that generally involves a group of people at the bank, and they don't work evenings or weekends. It's quite common for the process of offers and counter offers to take days or even weeks. Jeffrey Clee, Broker Associate is accustomed to these situations and will work to ensure there are no unnecessary delays.
When pondering the value of a foreclosure, carefully analyze comparable sales in the neighborhood and be sure to take into account the time and cost of any repairs or remodeling needed to prepare the house for resale. There are bargains with potential to make money, and many people do very well buying foreclosures. However there are also many REOs that are not good buys and not likely to turn a profit.
