Making an offer on REO property or a foreclosure in Manorville?
Making an offer on a bank-owned property is not something to be taken casually.
For more information, just contact me
through my site or e-mail me
. I'm glad to address any questions you have regarding real estate foreclosures.
What's an REO?
"REO" is Real Estate Owned. These are properties which have been through foreclosure that the bank or mortgage company presently owns. This is not the same as 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 added during the foreclosure process. You must also be ready to pay with cash in hand. To top everything off, you'll get the property entirely as is. That may consist of existing liens and even current residents that need to be removed.
A bank-owned property, on the contrary, is a much neater and attractive transaction. The REO property didn't find a buyer during foreclosure auction. The lender now owns it. The bank will see 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.
Note that REOs may be exempt from standard disclosure requirements.
For example, in Texas, it is optional for foreclosures to have a Property Disclosure Statement,
a document that ordinarily requires sellers to tell you about any defects of which they are aware.
By hiring Talmage Trail Realty, you can rest assured knowing all parties are fulfilling New York state disclosure requirements.
Is REO property in Manorville a bargain?
It is commonly thought that any foreclosure must be a steal and a possibility for guaranteed profit. This frequently isn't true. You have to be prudent about buying a REO if your intent is to make money. Even though the bank is typically eager to offload it soon, they are also looking to minimize any losses.
When considering what to pay for REO property, 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 foreclosures. But, there are also many REOs that are not good buys and may lose money.
Ready to make an offer?
Most mortgage companies have a department dedicated to REO that you'll work with while buying REO property from them. Commonly 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 discover as much as you can about their knowledge about the condition of the property and what their process is for taking offers. Since banks usually sell REO properties "as is", it's often prudent to include an inspection contingency in your offer that gives you time to check for hidden damage and cancel the offer if you find it.
As with making any offer on real estate, your offer may be more attractive if you can include documentation of your ability to pay, such as a pre-approval letter from a lender.
After you've made your offer, you can expect the bank to respond with a counter offer. At this point it will be your decision whether to accept their counter, or offer a counter to the counter offer.
Your deal could 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.