Purchasing REO property or a foreclosure in Flagler Beach, Palm Coast, Beachside?
|Purchasing a bank-owned property is not something to be taken lightly. Should you have any questions about real estate in Flagler Beach, Palm Coast, Beachside, Florida, call me or send me an e-mail.|
What is an REO?"REO" or Real Estate Owned are homes which have completed the foreclosure process that the bank or mortgage company currently possesses. This is not the same as a property 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 added during the foreclosure process. The buyer must also be prepared to pay with cash in hand. To top everything off, you'll receive the property totally as is. That possibly may consist of existing liens and even current denizens that may require removal.
A bank-owned property, on the other hand, is a much neater and attractive proposition. The REO property was unable to find a buyer during foreclosure auction. The lender now owns it. The bank will attend to 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.
Take notice 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 usually requires sellers to reveal any defects they are informed of. By hiring Ben & Marie Lane, Two Lanes Real Estate, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Is REO property in Flagler Beach, Palm Coast, Beachside a bargain?It is occasionally assumed that any REO must be a good deal and an opportunity for guaranteed profit. This isn't necessarily true. You have to be cautious about buying a repossession if your intent is to make money off of it. While it's true that the bank is typically eager to sell it fast, they are also motivated to minimize any losses.
When contemplating what to pay for 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 buying foreclosures. But, there are also many REOs that are not good buys and may lose money.
Time to make an offer?Most banks have staff dedicated to REO that you'll work with while 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 discover as much as you can about their knowledge regarding the condition of the property and what their process is for getting 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 hidden damage and retract the offer if you find it. As with making any offer on real estate, providing documentation proving your ability to pay may make your offer more attractive, such as a pre-approval letter from a lender.
Once you've presented your offer, you can expect the bank to counter offer. At this point it will be your decision whether to accept their counter, or submit another counter offer. Your deal might be final in a single day, but that's rare. 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.