Purchasing REO property or a foreclosure in Media?
|Foreclosed upon and bank owned property purchases require the assistance of an experience professional.|
What's an REO?"REO" or Real Estate Owned are homes which have been foreclosed upon and are now owned by the bank or mortgage company. This differs from 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 accumulated during the foreclosure process. You must also be willing to pay with cash in hand. Finally, you'll accept the property 100% as is. That possibly may consist of current liens and even current tenants that may require expulsion.
A bank-owned property, on the other hand, is a much neater and attractive deal. The REO property was unable to find a buyer during foreclosure auction. Now the bank owns it. The lender will deal with the elimination 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 usually requires sellers to disclose any defects they are informed of. By hiring RE/MAX Hometown Realtors, you can rest assured knowing all parties are fulfilling Pennsylvania state disclosure requirements.
Is REO property in Media a bargain?It's occasionally believed that any foreclosure must be a bargain and a chance for guaranteed profit. This simply isn't true. You have to be cautious about buying a REO if your intent is make money. Even though the bank is typically anxious to sell it promptly, they are also looking to get as much as they can for it.
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. There are bargains with potential to make money, 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.
All set to make an offer?Most lenders have staff dedicated to REO that you'll work with when buying REO property from them. To get their properties advertised on the local MLS, the lender will typically use a listing agent.
Prior to 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 accepting 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 unknown damage and terminate 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 is generally true for any real estate offer.)
After you've submitted your offer, it's customary for the bank to make a counter offer. At this point it will be up to you to decide whether to accept their counter, or make another counter offer. Your deal could be settled in a single 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) you could be looking at a week or longer. RE/MAX Hometown Realtors is are used to working around the schedules of this type of seller and will do everything possible to ensure there are no unnecessary delays.