Buying REO property or a foreclosure in Naples?
|Smart consumers will turn to a seasoned pro when considering the purchase of a foreclosed property. For more information, simply contact me through my site or e-mail me. I'm glad to address questions you have about real estate foreclosures.|
What's an REO?"REO" is an abbreviation for Real Estate Owned. These are homes which have been foreclosed upon that the bank or mortgage company now owns. This is not the same as real estate up for foreclosure auction.
When buying 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. And on top of all that, you'll get the property completely as is. That possibly could involve prevailing liens and even current occupants that need to be put out.
A bank-owned property, conversely, is a much cleaner and attractive proposition. The REO property was unable to find a buyer during foreclosure auction. The bank now owns it. The bank will see to the elimination of tax liens, evict occupants if needed and generally plan for the issuance of a title insurance policy to the buyer at closing.
You should be aware that REOs may be exempt from typical disclosure requirements. For instance, in California, banks do not have to give a Transfer Disclosure Statement, a document that typically requires sellers to reveal any defects of which they are aware. By hiring Downing Frye Realty, Inc., you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Is REO property in Naples a bargain?It is occasionally thought that any foreclosure must be a good deal and an opportunity for easy money. This isn't always the case. You have to be cautious about buying a REO if your intent is to make money off of it. Even though the bank is typically anxious to sell it soon, they are also looking to minimize any losses.
Look carefully at the listing and sales prices of comparable homes in the neighborhood when considering the purchase of an REO. And factor in any repairs or upgrades necessary to prepare the house for resale or moving in. 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 not likely to turn a profit.
Time to make an offer?Most lenders have a department 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 typically 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 find out as much as you can about what they know regarding the condition of the property and what their process is for receiving 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 unseen damage and cancel 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 presented your offer, you can expect the bank to counter offer. From there it will be up to you to decide whether to accept their counter, or submit another counter offer. Be aware, you'll be dealing with a process that probably involves a group of people at the bank, and they don't work evenings or weekends. It's not unusual for there to be days or even weeks of negotiating back and forth. Downing Frye Realty, Inc. 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.