Making an offer on REO property or a foreclosure in Fairview Park?
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Investing in a bank-owned property is not something to be taken lightly. | ||
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What is an REO?
"REO" or Real Estate Owned are homes which have completed the foreclosure process that the bank or mortgage company currently holds. 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 accrued during the foreclosure process. You must also be able to pay with cash in hand. To top everything off, you'll accept the property completely as is. That possibly may consist of current liens and even current tenants that need to be removed.
A bank-owned property, on the contrary, is a much neater and attractive option. The REO property did not find a buyer during foreclosure auction. Now the bank owns it. The lender 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.
Note that REOs may be exempt from standard disclosure requirements. For example, in California, banks are exempt from giving a Transfer Disclosure Statement, a document that ordinarily requires sellers to reveal any defects they are aware of. By hiring Professional Realty & Investment Group, you can rest assured knowing all parties are fulfilling Ohio state disclosure requirements.
Are REO properties a bargain in Fairview Park?
It's sometimes presumed that any REO must be a good deal and a chance for guaranteed profit. This isn't necessarily the case. You have to be very careful about buying a REO if your intent is to make money off of it. Even though the bank is usually anxious to offload it fast, they are also motivated to minimize any losses.
Look carefully at the listing and sales prices of competing homes in the neighborhood when making an offer on an REO. And factor in any repairs or remodeling necessary to prepare the house for resale or moving in.
There are bargains with potential to make money, and many people do very well buying and selling foreclosures. But there are also many REOs that are not good buys and not likely to turn a profit.
Prepared to make an offer?
Most banks have staff dedicated to REO that you'll work with in buying REO property from them. Usually the REO department will use a listing agent to get their REO properties listed on the local MLS.Before making your offer, you'll want to contact either the listing agent or REO department at the bank and find out 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 usually sell REO properties "as is", you may want to include an inspection contingency in your offer that gives you time to check for unseen damage and withdraw 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.
After you've presented your offer, it's customary for the bank to respond with a counter offer. At this point it will be up to you to decide whether to accept their counter, or make another counter offer. Realize, you'll be working with a process that generally involves several people at the bank, and they don't work evenings or weekends. It's quite common for the process of offers and counter offers to take days or even weeks. Professional Realty & Investment Group is are used to working around the schedules of this type of seller and will do everything possible to ensure there are no undue delays.