Making an offer on REO property or a foreclosure in Clearwater?
Smart consumers will turn to a seasoned pro when considering the purchase of 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 regarding real estate foreclosures.
What's an REO?
"REO" or Real Estate Owned are homes which have gone through foreclosure that the bank or mortgage company currently possesses. 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 added during the foreclosure process. You must also be prepared to pay with cash in hand. Finally, you'll receive the property 100% as is. That possibly may consist of standing liens and even current tenants that may require expulsion.
A bank-owned property, conversely, is a much cleaner and attractive transaction. The REO property did not find a buyer during foreclosure auction. The bank now owns it. The bank will see to 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 standard disclosure requirements. For example, in California, banks are not required to give a Transfer Disclosure Statement, a document that ordinarily requires sellers to reveal any defects they are aware of. By hiring BRIGITTE LUKAS-SZABADY @ REALTY EXECUTIVES-SUNCOAST, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Am I guaranteed a low price when investing in an REO property in Clearwater?
It is occasionally thought that any REO must be a good buy and a possibility for easy money. This often isn't true. You have to be prudent about buying a REO if your intent is make a profit. Even though the bank is usually eager to offload it promptly, they are also looking to get as much as they can for it.
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 buying and selling foreclosures. Still there are also many REOs that are not good buys and not likely to turn a profit.
Ready to make an offer?
Most banks have a department 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 accepting 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 withdraw 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 holds for any real estate offer.)
After you've presented your offer, you can expect the bank to counter offer. At this point it will be your decision whether to accept their counter, or submit another counter offer. Your deal could be final in a single day, but that's usually not the case. 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. BRIGITTE LUKAS-SZABADY @ REALTY EXECUTIVES-SUNCOAST is accustomed to these situations and will work to ensure there are no unnecessary delays.
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 buying and selling foreclosures. Still there are also many REOs that are not good buys and not likely to turn a profit.
