Buying REO property or a foreclosure in Brandon?
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What is an REO?"REO" means Real Estate Owned. These are homes which have completed the foreclosure process and are currently held 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 accrued during the foreclosure process. You must also be willing to pay with cash in hand. To top everything off, you'll accept the property completely as is. That might involve prevailing liens and even current residents that may require removal.
A bank-owned property, on the contrary, is a more tidy and attractive option. The REO property didn't find a buyer during foreclosure auction. Now the bank owns it. The lender will attend to 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 normal disclosure requirements. For example, in California, banks do not have to give a Transfer Disclosure Statement, a document that typically requires sellers to tell you about any defects they are informed of. By hiring LARRY BARTOW - Keller Williams Realty, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Is REO property in Brandon a bargain?It's commonly presumed that any REO must be a good deal and a possibility for easy money. This isn't necessarily the case. You have to be prudent about buying a repossession if your intent is to make money. Even though the bank is typically eager to sell it quickly, they are also motivated to get as much as they can for it.
Look carefully at the listing and sales prices of similar homes in the neighborhood when making an offer on an REO. And factor in any repairs or remodeling necessary to prepare the house for resale or moving in. There are bargains with potential to make money, and many people do very well buying and selling foreclosures. But, there are also many REOs that are not good buys and may lose money.
All set 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 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 find out as much as you can about what they know about the condition of the property and what their process is for accepting offers. Since banks typically 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 withdraw 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 submitted your offer, it's customary for the bank to counter offer. Then it will be up to you to decide whether to accept their counter, or offer a counter to the counter offer. Your transaction might be settled in one day, but that's usually not the case. Since offers and counter offers usually give the other party a day or longer to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer. LARRY BARTOW - Keller Williams Realty is accustomed to these situations and will work to ensure there are no undue delays.