Making an offer on REO property or a foreclosure in LOUGHMAN?
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Just as with any home purchase, your wisest move is to hire a professional real estate agent. | ||
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What is an REO?
"REO" is short for Real Estate Owned. These are houses which have gone through foreclosure and are now possessed by the bank or mortgage company. This is different than a property 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 amassed during the foreclosure process. You must also be willing to pay with cash in hand. To top everything off, you'll accept the property completely as is. That may comprise of current liens and even current occupants that may require removal.
A bank-owned property, on the other hand, is a more tidy and attractive option. The REO property did not find a buyer during foreclosure auction. The lender now owns it. The lender will handle the removal 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 not required to give a Transfer Disclosure Statement, a document that usually requires sellers to make known any defects of which they are knowledgeable. By hiring GLOBAL SERVICES REALTY LLC. & GLOBAL SOLUTION & SERVICES LLC, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Are REO properties a bargain in LOUGHMAN?
It is sometimes assumed that any foreclosure must be a steal and a chance for easy money. This isn't always true. You have to be cautious about buying a repossession if your intent is profit from the sale. Even though the bank is often anxious to offload it promptly, they are also motivated to get as much as they can for it.
When contemplating the value of REO property, you need to look closely at 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 flipping foreclosures. However there are also many REOs that are not good buys and not likely to turn a profit.
Prepared to make an offer?
Most lenders have a department dedicated to REO that you'll work with in buying REO property from them. Commonly the REO department will use a listing agent to get their REO properties listed on the local MLS.Before 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 their knowledge regarding the condition of the property and what their process is for taking offers. Since banks most commonly sell REO properties "as is", it may be in your best interest 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. As with making any offer on real estate, providing documentation of your ability to pay may make your offer more attractive, such as a pre-approval letter from a lender.
After you've made your offer, you can expect the bank to respond with a counter offer. From there it will be your decision whether to accept their counter, or submit another counter offer. Realize, you'll be working with a process that most likely involves several people at the bank, and they don't work evenings or weekends. It's not unusual for there to be days or even weeks of going back and forth. GLOBAL SERVICES REALTY LLC. & GLOBAL SOLUTION & SERVICES LLC is accustomed to these situations and will work to ensure there are no unnecessary delays.
