|
|
|
|
|
|
Buying REO property or a foreclosure in Escondido?
 |
 |
 |
Smart consumers will turn to a seasoned pro when considering a foreclosed property.
|
|
|
|
 |
What's an REO?
"REO" or Real Estate Owned are properties which have been foreclosed upon that the bank or mortgage company now possesses. This is unlike 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 accrued 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 could include current liens and even current denizens that need to be evicted.
A bank-owned property, on the contrary, is a much neater and attractive deal. The REO property did not find a buyer during foreclosure auction. Now the lender owns it. The bank will take care of 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.
You should be aware that REOs may be exempt from standard disclosure requirements.
For example, in Nevada, it is optional for foreclosures to have a Property Disclosure Statement,
a document that ordinarily requires sellers to make known any defects they are knowledgeable of.
By hiring Real Estate eBroker DRE# 01852221, you can rest assured knowing all parties are fulfilling California state disclosure requirements.
Is REO property in Escondido a bargain?
It is frequently believed that any foreclosure must be a steal and an opportunity for easy money. This frequently isn't true. You have to be prudent about buying a repossession if your intent is make a profit. While it's true that the bank is typically eager to sell it quickly, they are also looking to get as much as they can for it.
When contemplating what to pay for a foreclosure, 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 flipping foreclosures. But there are also many REOs that are not good buys and not likely to turn a profit.
Prepared to make an offer?
Most banks 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 their knowledge concerning the condition of the property and what their process is for accepting offers. Since banks most commonly sell REO properties "as is", you may want to include an inspection contingency in your offer that gives you time to check for hidden damage and retract the offer if you find it.
If, as a buyer, you can provide documentation demonstrating 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 is generally true for any real estate offer.)
After you've submitted your offer, it's customary for the bank to respond with a counter offer. Then it will be up to you to decide whether to accept their counter, or submit another counter offer.
Be aware, you'll be working with a process that generally involves several people at the bank, and they don't work evenings or weekends. It's not uncommon for the process of offers and counter offers to take days or even weeks.
|
|
|
|
|