Interested in REO property or a foreclosure in ?
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Investing in a bank-owned property is not something to be taken lightly. Should you have any questions about real estate in , Florida, call me or send me an e-mail. | ||
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What is an REO?
"REO" or Real Estate Owned are homes which have been through foreclosure and are now owned by the bank or mortgage company. This is different than real estate up for foreclosure auction.
If you buy 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 willing to pay with cash in hand. And on top of all that, you'll get the property completely as is. That might involve existing liens and even current denizens that need to be expelled.
A bank-owned property, by contrast, is a much neater and attractive deal. The REO property did not find a buyer during foreclosure auction. Now the bank owns it. The bank will attend to the removal of tax liens, evict occupants if needed and generally arrange 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 example, in Nevada, it is optional for foreclosures to have a Property Disclosure Statement, a document that normally requires sellers to disclose any defects they are aware of. By hiring Welcome Home Realty International, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Are REO properties a bargain in Martin County?
It is occasionally believed that any foreclosure must be a good buy and an opportunity for easy money. This frequently isn't true. You have to be very careful about buying a repossession if your intent is to make money. Even though the bank is often eager to sell it fast, they are also motivated to get as much as they can for it.
Look closely at the listing and sales prices of similar homes in the neighborhood when considering the purchase of an REO. And factor in any repairs or remodeling necessary to prepare the house for resale or moving in. There are bargains with potential to make money, and many people do very well flipping foreclosures. However, there are also many REOs that are not good buys and not likely to turn a profit.
Ready to make an offer?
Most banks have a department dedicated to REO that you'll work with when buying REO property from them. To get their properties advertised on the local MLS, the lender will typically hire a listing agent.Prior to making your offer, you'll want to contact either the listing agent or REO department at the bank and learn as much as you can about what they know about the condition of the property and what their process is for accepting offers. Since banks typically sell REO properties "as is", it's often prudent to include an inspection contingency in your offer that gives you time to check for hidden damage and cancel the offer if you find it. If, as a buyer, you can provide documentation proving your ability to secure financing, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This goes for any real estate offer.)
Once you've submitted your offer, you can expect the bank to respond with a counter offer. Then it will be your choice whether to accept their counter, or make another counter offer. Your transaction might be settled in a single day, but that's rare. Since offers and counter offers usually allow a day or more for the other party to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer. Welcome Home Realty International is accustomed to these situations and will work to ensure there are no unnecessary delays.
