Buying REO property or a foreclosure in Seminole?
Smart consumers will turn to a seasoned pro when considering a foreclosed property. For more information, just contact me through my site or e-mail me. I'm glad to answer any questions you have about real estate foreclosures.
What's an REO?
"REO" is short for Real Estate Owned. These are properties which have completed the foreclosure process and are presently owned by the bank or mortgage company. This is different than a property 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. You must also be ready to pay with cash in hand. To top everything off, you'll get the property 100% as is. That possibly could comprise of prevailing liens and even current denizens that need to be expelled.
A bank-owned property, on the contrary, is a much cleaner and attractive proposition. The REO property didn't find a buyer during foreclosure auction. Now the bank owns it. The lender will attend to the elimination of tax liens, evict occupants if needed and generally organize for the issuance of a title insurance policy to the buyer at closing.
Note that REOs may be exempt from typical disclosure requirements. For example, in North Carolina, it is optional for foreclosures to have a Property Disclosure Statement, a document that ordinarily requires sellers to reveal any defects they are knowledgeable of. By hiring Future Home Realty, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Are REO properties a bargain in Pinellas county?
It's occasionally assumed that any foreclosure must be a steal and an opportunity for guaranteed profit. This frequently isn't true. You have to be prudent about buying a REO if your intent is to make a profit. Even though the bank is often eager to sell it fast, they are also looking to minimize any losses.
When considering what to pay for REO property, 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. The bargains with money making potential exist, and many people do very well buying and selling foreclosures. Still, there are also many REOs that are not good buys and may lose money.
Prepared to make an offer?
Most mortgage companies have staff 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 frequently use a listing agent.
Prior to 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 about the condition of the property and what their process is for receiving offers. Since banks usually sell REO properties "as is", you may want to include an inspection contingency in your offer that gives you time to check for unknown damage and cancel the offer if you find it. As with making any offer on real estate, you'll make your offer more attractive if you can include documentation of your ability to pay, such as a pre-approval letter from a lender.
After you've presented 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 make another counter offer. Your transaction might be settled in a single day, but that's rare. Since offers and counter offers usually give the other party a day or longer to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer. Maria Mitchell is accustomed to these situations and will work to ensure there are no unnecessary delays.