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Making an offer on REO property or a foreclosure in Washington?
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Savvy consumers will turn to a seasoned pro when considering a foreclosed property.
If you have questions about real estate in Washington, North Carolina, call me or send me an e-mail.
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What is an REO?
"REO" or Real Estate Owned are houses which have been foreclosed upon that the bank or mortgage company now holds. This is unlike 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 amassed during the foreclosure process. The buyer must also be ready to pay with cash in hand. To top everything off, you'll accept the property 100% as is. That possibly will include standing liens and even current tenants that need to be kicked out.
A bank-owned property, on the other hand, is a much cleaner and attractive option. The REO property was unable to find a buyer during foreclosure auction. Now the lender owns it. The bank will attend 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.
Take notice that REOs may be exempt from typical disclosure requirements.
For example, in North Carolina, it is optional for foreclosures to have a Property Disclosure Statement,
a document that usually requires sellers to make known any defects they are aware of.
By hiring Maria Wilson - Coldwell Banker Coastal Rivers Realty, you can rest assured knowing all parties are fulfilling North Carolina state disclosure requirements.
Are REO properties a bargain in Washington?
It is sometimes thought that any REO 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 make money. Even though the bank is often eager to offload it promptly, they are also motivated to minimize any losses.
When pondering 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.
The bargains with money making potential exist, and many people do very well flipping foreclosures. But there are also many REOs that are not good buys and not likely to turn a profit.
Time to make an offer?
Most banks 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 usually hire a listing agent.
Before 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 concerning the condition of the property and what their process is for receiving offers. Since banks typically sell REO properties "as is", it may be in your best interest to include an inspection contingency in your offer that gives you time to check for unknown 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.
After you've made your offer, you can expect the bank to counter offer. From there it will be your choice whether to accept their counter, or make another counter offer.
Realize, you'll be contending with a process that probably involves several people at the bank, and they don't work evenings or weekends. It's quite common for the process of offers and counter offers to take days or even weeks. Maria Wilson - Coldwell Banker Coastal Rivers Realty 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.
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