Looking for REO property or a foreclosure in YOUR area?
Foreclosed upon and bank owned property purchases require the assistance of an experience professional.
What's an REO?
"REO" or Real Estate Owned are houses which have been foreclosed upon that the bank or mortgage company currently possesses. This is unlike 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 accumulated during the foreclosure process. The buyer must also be prepared to pay with cash in hand. To top everything off, you'll get the property 100% as is. That could comprise of standing liens and even current occupants that need to be put out.
A bank-owned property, on the other hand, is a more tidy and attractive option. The REO property was unable to find a buyer during foreclosure auction. Now the bank owns it. The bank will attend to 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 example, in California, banks are not required to give a Transfer Disclosure Statement,
a document that normally requires sellers to reveal any defects they are knowledgeable of.
By hiring Capital One Group, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Are REO properties in your area a bargain?
It is commonly assumed that any REO must be a steal and a chance 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 promptly, they are also motivated to get as much as they can for it.
When considering 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.
It is possible to find REOs with money-making potential, and many people do very well buying foreclosures. But, there are also many REOs that are not good buys and may lose money.
Time to make an offer?
Most banks 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 contract with 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 regarding the condition of the property and what their process is for taking offers. Since banks usually 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 unseen damage and retract the offer if you find it.
As with making any offer on real estate, you'll make your offer more attractive if you can include documentation of your ability to pay, such as a pre-approval letter from a lender.
Once you've submitted your offer, you can expect the bank to counter offer. Then it will be up to you to decide whether to accept their counter, or submit another counter offer.
Your transaction might be final in one 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.