Looking for REO property or a foreclosure in Richardson?
Smart consumers will turn to a seasoned pro when considering a foreclosed property. For more information, just contact me
through my site or e-mail me
. I'm glad to address any questions you have about real estate foreclosures.
What is an REO?
"REO" or Real Estate Owned are houses which have completed the foreclosure process and are now held by the bank or mortgage company. This is unlike 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 amassed during the foreclosure process. You must also be prepared to pay with cash in hand. And on top of all that, you'll accept the property totally as is. That might consist of prevailing liens and even current occupants that need to be evicted.
A bank-owned property, on the contrary, is a more tidy and attractive transaction. The REO property was unable to find a buyer during foreclosure auction. The bank now owns it. The lender will handle 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 standard disclosure requirements. For example, in Nevada, it is optional for foreclosures to have a Property Disclosure Statement, a document that normally requires sellers to make known any defects about which they are knowledgeable. By hiring Washburn Realty Group, you can rest assured knowing all parties are fulfilling Texas state disclosure requirements.
Am I guaranteed a bargain when investing in a bank owned property?
It's frequently presumed that any foreclosure must be a good buy and an opportunity for guaranteed profit. This simply isn't true. You have to be very careful about buying a REO if your intent is to make a profit. Even though the bank is often eager to offload it quickly, they are also motivated to minimize any losses.
When contemplating the value of a foreclosure, carefully analyze 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.
Time to make an offer?
Most mortgage companies have a department dedicated to REO that you'll work with when buying an REO property from them. Typically 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 the condition of the property and what their process is for receiving offers. Since banks typically 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. If, as a buyer, you can provide documentation proving your ability to pay, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This holds for any real estate offer.)
After you've presented your offer, it's customary for the bank to make a counter offer. Then it will be up to you to decide whether to accept their counter, or make another counter offer. Your deal might be settled 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) this could take a week or longer. Washburn Realty Group is accustomed to working around the schedules of this type of seller and will do everything possible to ensure there are no undue delays.