Buying REO property or a foreclosure in Starke?
Savvy consumers will turn to a seasoned pro when considering a foreclosed property.
What's an REO?
"REO" or Real Estate Owned are homes which have gone through foreclosure that the bank or mortgage company presently holds. This is unlike 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 ready to pay with cash in hand. To top everything off, you'll get the property completely as is. That possibly will include standing liens and even current denizens that need to be put out.
A bank-owned property, by contrast, is a much cleaner and attractive proposition. The REO property didn't find a buyer during foreclosure auction. Now the bank owns it. The bank will deal with the removal of tax liens, evict occupants if needed and generally organize 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 North Carolina, it is optional for foreclosures to have a Property Disclosure Statement,
a document that usually requires sellers to reveal any defects they are knowledgeable of.
By hiring American Dream of Northeast Florida, Inc., you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Are REO properties a bargain in Starke?
It is commonly believed that any REO must be a bargain and an opportunity for easy money. This simply isn't true. You have to be very careful about buying a REO if your intent is to profit from the sale. While it's true that the bank is usually eager to offload it soon, they are also motivated to get as much as they can for it.
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 upgrades 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 buying and selling foreclosures. Still, there are also many REOs that are not good buys and may not be money makers.
Ready to make an offer?
Most lenders 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 hire a listing agent.
Before 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 what they know concerning the condition of the property and what their process is for receiving offers. Since banks most commonly sell REO properties "as is", it's often prudent to 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 holds for any type of real estate offer.)
Once you've made your offer, it's customary for the bank to respond with a counter offer. Then it will be your choice whether to accept their counter, or offer a counter to the counter offer.
Your transaction might be settled 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. American Dream of Northeast Florida, Inc. is accustomed to these situations and will work to ensure there are no unnecessary delays.