Buying REO property or a foreclosure in Englewood?
Savvy consumers will turn to a seasoned pro when considering a foreclosed property.
Should you have any questions regarding real estate in Englewood, Florida, call me or send me an e-mail.
What is an REO?
"REO" or Real Estate Owned are homes which have been through foreclosure that the bank or mortgage company presently owns. This differs from a property 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 able to pay with cash in hand. To top everything off, you'll accept the property entirely as is. That may consist of standing liens and even current tenants that need to be evicted.
A bank-owned property, by contrast, is a much cleaner and attractive proposition. The REO property didn't find a buyer during foreclosure auction. The bank now owns it. The lender will see to the removal of tax liens, evict occupants if needed and generally prepare for the issuance of a title insurance policy to the buyer at closing.
Take notice that REOs may be exempt from normal disclosure requirements.
For example, in California, banks are exempt from giving a Transfer Disclosure Statement,
a document that typically requires sellers to tell you about any defects of which they are knowledgeable.
By hiring Judy Fisher, REALTOR®, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Am I assured a bargain when investing in a bank owned property in Englewood?
It's occasionally assumed that any foreclosure must be a good buy and an opportunity for easy money. This isn't necessarily the case. You have to be very careful about buying a repossession if your intent is make money. While it's true that the bank is usually eager to offload it quickly, they are also motivated to get as much as they can for it.
When contemplating 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.
It is possible to find REOs with money-making potential, and many people do very well flipping foreclosures. However 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 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 often contract with a listing agent.
Prior to 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 almost always 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 withdraw 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 real estate offer.)
After you've submitted your offer, you can expect the bank to counter offer. From there it will be your choice whether to accept their counter, or offer a counter to the counter offer.
Your transaction could be final in one 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. Judy Fisher, REALTOR® is are used to working around the schedules of this type of seller and will do everything possible to ensure there are no unnecessary delays.
When contemplating 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.
It is possible to find REOs with money-making potential, and many people do very well flipping foreclosures. However there are also many REOs that are not good buys and not likely to turn a profit.
