|
|
|
|
Buying REO property or a foreclosure in Valrico?
 |
 |
 |
Investing in a bank-owned property is not something to be taken casually.
If you have questions regarding real estate in Valrico, Florida, call me or send me an e-mail.
|
|
|
|
 |
What is an REO?
"REO" or Real Estate Owned are homes which have completed the foreclosure process and are presently possessed by the bank or mortgage company. This is different than 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. You must also be ready to pay with cash in hand. And on top of all that, you'll receive the property completely as is. That may involve prevailing liens and even current residents that may require expulsion.
A bank-owned property, on the other hand, is a much neater and attractive proposition. The REO property was unable to find a buyer during foreclosure auction. Now the bank owns it. The bank will deal with 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.
You should be aware that REOs may be exempt from normal disclosure requirements.
For instance, in California, banks are exempt from giving a Transfer Disclosure Statement,
a document that typically requires sellers to tell you about any defects they are knowledgeable of.
By hiring Liz Young, Realtor®, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Is REO property in Valrico a bargain?
It's sometimes assumed that any foreclosure must be a good buy and a possibility for guaranteed profit. This isn't necessarily the case. You have to be very careful about buying a repossession if your intent is make money. Even though the bank is often eager to sell it fast, they are also motivated to minimize any losses.
Look closely at the listing and sales prices of comparable homes in the neighborhood when making an offer on an REO. And factor in any repairs or remodeling necessary to prepare the house for resale or moving in.
It is possible to find REOs with money-making potential, and many people do very well flipping foreclosures. But 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 while 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 learn as much as you can about their knowledge about the condition of the property and what their process is for getting offers. Since banks typically 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 unknown damage and terminate the offer if you find it.
If, as a buyer, you can provide documentation proving your ability to pay, 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 presented your offer, you can expect the bank to make a counter offer. At this point it will be your choice whether to accept their counter, or offer a counter to the counter offer.
Be aware, you'll be dealing with a process that generally involves a group of 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.
|
|
|
|
