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Making an offer on REO property or a foreclosure in Port Charlotte?
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Making an offer on a bank-owned property is not something to be taken casually.
For more information, you can contact me through my site or e-mail me. I'm glad to answer any questions you have regarding real estate foreclosures.
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What is an REO?
"REO" or Real Estate Owned are houses which have been through foreclosure and are currently possessed by the bank or mortgage company. This is unlike 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 amassed during the foreclosure process. The buyer must also be ready to pay with cash in hand. To top everything off, you'll get the property 100% as is. That may consist of current liens and even current denizens that need to be evicted.
A bank-owned property, conversely, is a much cleaner and attractive option. The REO property didn't find a buyer during foreclosure auction. Now the lender owns it. The bank will take care of the removal of tax liens, evict occupants if needed and generally plan for the issuance of a title insurance policy to the buyer at closing.
Do be aware that REOs may be exempt from typical disclosure requirements.
In California, for example, banks are exempt from giving a Transfer Disclosure Statement,
a document that normally requires sellers to make known any defects they are knowledgeable of.
By hiring Gulf Access Homes Inc., you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Is REO property in Port Charlotte a bargain?
It's frequently assumed that any REO must be a steal and a possibility for guaranteed profit. This isn't necessarily true. You have to be cautious about buying a repossession if your intent is profit from the sale. Even though the bank is often anxious to sell it promptly, they are also looking to minimize any losses.
Look carefully at the listing and sales prices of comparable properties in the neighborhood when making an offer on an REO. And factor in any repairs or upgrades necessary to prepare the house for resale or moving in.
It is possible to find REOs with money-making potential, and many people do very well buying and selling 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 mortgage companies have staff 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 often hire 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 accepting offers. Since banks almost always sell REO properties "as is", it's often prudent to include an inspection contingency in your offer that gives you time to check for unseen damage and terminate the offer if you find it.
As with making any offer on real estate, your offer may be more attractive if you can include documentation of your ability to pay, such as a pre-approval letter from a lender.
After you've presented your offer, it's customary for the bank to make a counter offer. At this point it will be your choice whether to accept their counter, or offer a counter to the counter offer.
Understand, you'll be dealing with a process that usually involves a group of people at the bank, and they don't work evenings or weekends. It's not unusual for the process of offers and counter offers to take days or even weeks. Gulf Access Homes Inc. is accustomed to these situations and will work to ensure there are no undue delays.
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