Making an offer on REO property or a foreclosure in Castle Rock?
|Foreclosed upon and bank owned property purchases require the assistance of an experience professional. For more information, just contact me through my site or e-mail me. I'm glad to address questions you have regarding real estate foreclosures.|
What's an REO?"REO" stands for Real Estate Owned. These are houses which have been through foreclosure and are currently owned 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 added during the foreclosure process. You must also be willing to pay with cash in hand. To top everything off, you'll receive the property completely as is. That might consist of current liens and even current tenants that may require expulsion.
A bank-owned property, by contrast, is a much neater and attractive deal. The REO property was unable to find a buyer during foreclosure auction. The bank now owns it. The bank will take care of the elimination of tax liens, evict occupants if needed and generally plan for the issuance of a title insurance policy to the buyer at closing.
Take notice that REOs may be exempt from typical disclosure requirements. For instance, in California, banks do not have to give a Transfer Disclosure Statement, a document that usually requires sellers to tell you about any defects of which they are knowledgeable. By hiring Sabina Kier, you can rest assured knowing all parties are fulfilling Colorado state disclosure requirements.
Are REO properties a bargain in Douglas County?It's commonly assumed that any foreclosure must be a bargain and a chance for guaranteed profit. This isn't necessarily the case. You have to be very careful about buying a REO if your intent is profit from the sale. Even though the bank is often anxious to sell it fast, they are also looking to get as much as they can for it.
When pondering 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. The bargains with money making potential exist, and many people do very well buying foreclosures. However there are also many REOs that are not good buys and may lose money.
Prepared to make an offer?Most lenders 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 typically contract with a listing agent.
Prior to making your offer, you'll want to contact either the listing agent or REO department at the bank and find out as much as you can about what they know concerning the condition of the property and what their process is for receiving offers. Since banks most commonly sell REO properties "as is", it's often prudent to include an inspection contingency in your offer that gives you time to check for unseen damage and withdraw the offer if you find it. As with making any offer on real estate, providing documentation proving your ability to secure financing may make your offer more attractive, such as a pre-approval letter from a lender.
Once you've submitted your offer, you can expect the bank to make a counter offer. From there it will be up to you to decide whether to accept their counter, or submit another counter offer. Be aware, you'll be contending with a process that usually involves a group of people at the bank, and they don't work evenings or weekends. It's not unusual for the process of offers and counter offers to take days or even weeks.