Purchasing REO property or a foreclosure in Homestead?
Just as with any property purchase, your wisest move is to hire a professional real estate agent.
For more information, you can contact me
through my site or e-mail me
. I'm happy to answer any questions you have about real estate foreclosures.
What's an REO?
"REO" or Real Estate Owned are homes which have completed the foreclosure process that the bank or mortgage company presently possesses. This is not the same as real estate up for foreclosure auction.
If you buy 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. The buyer must also be able to pay with cash in hand. And on top of all that, you'll get the property entirely as is. That possibly may comprise of prevailing liens and even current residents that need to be kicked out.
A bank-owned property, on the other hand, is a more tidy and attractive proposition. The REO property didn't find a buyer during foreclosure auction. The lender now owns it. The bank will handle 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 normal disclosure requirements.
For instance, in California, banks are not required to give a Transfer Disclosure Statement,
a document that usually requires sellers to make known any defects they are aware of.
By hiring Worth Real Estate Company, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Is REO property in Homestead a bargain?
It is sometimes believed that any foreclosure must be a good buy and a possibility for easy money. This isn't always true. You have to be prudent about buying a REO if your intent is to make a profit. Even though the bank is typically eager to offload it promptly, they are also looking to minimize any losses.
When considering the value of 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.
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 not be money makers.
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. Usually the REO department will use a listing agent to get their REO properties listed on the local MLS.
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 getting offers. Since banks almost always sell REO properties "as is", it may be in your best interest 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.
If, as a buyer, you can provide documentation proving 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 goes for any type of real estate offer.)
After you've made your offer, you can expect the bank to counter offer. Then it will be your decision whether to accept their counter, or submit another counter offer.
Your deal might be final in a single day, but that's usually not the case. 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. Worth Real Estate Company is used to working around the schedules of this type of seller and will do everything possible to ensure there are no undue delays.