Buying REO property or a foreclosure in Odessa or Tampa?
|Just as with any home purchase, your smartest move is to hire a professional real estate agent. For more information, simply contact me through my site or e-mail me. I'm glad to address questions you have about real estate foreclosures.|
What is an REO?"REO" means Real Estate Owned. These are houses which have been foreclosed upon that the bank or mortgage company now holds. This differs from real estate 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. The buyer must also be able to pay with cash in hand. Finally, you'll get the property completely as is. That possibly may involve current liens and even current occupants that may require eviction.
A bank-owned property, conversely, is a much cleaner and attractive proposition. The REO property was unable to find a buyer during foreclosure auction. The lender now owns it. The lender 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.
Note that REOs may be exempt from normal disclosure requirements. For example, in Texas, it is optional for foreclosures to have a Property Disclosure Statement, a document that usually requires sellers to disclose any defects they are knowledgeable of. By hiring Tampa Bay Real Estate, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Is REO property in Odessa a bargain?It is occasionally believed that any REO must be a bargain and a possibility for easy money. This isn't necessarily the case. You have to be prudent about buying a REO if your intent is to make a profit. While it's true that the bank is typically eager to offload it quickly, they are also looking to minimize any losses.
When pondering 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. 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 may lose money.
All set 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 usually use a listing agent.
Before 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 regarding the condition of the property and what their process is for receiving offers. Since banks usually sell REO properties "as is", you'll want to be sure and include an inspection contingency in your offer that gives you time to check for hidden damage and terminate 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.
After you've made your offer, you can expect the bank to make a counter offer. Then it will be up to you to decide whether to accept their counter, or submit another counter offer. Your deal could be settled in one 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. Tampa Bay Real Estate is used to working around the schedules of this type of seller and will do everything possible to ensure there are no unnecessary delays.