Making an offer on REO property or a foreclosure in Coral Springs?
Savvy consumers will turn to a seasoned pro when considering a foreclosed property.
Should you have any questions about real estate in Coral Springs, Florida, call me or send me an e-mail.
What's an REO?
"REO" or Real Estate Owned are homes which have been foreclosed upon that the bank or mortgage company currently holds. This differs from real estate 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 amassed during the foreclosure process. The buyer must also be prepared to pay with cash in hand. Finally, you'll receive the property 100% as is. That possibly could include existing liens and even current occupants that need to be kicked out.
A bank-owned property, on the other hand, is a much neater and attractive transaction. The REO property was unable to find a buyer during foreclosure auction. The lender now owns it. The lender will see 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.
Do be aware that REOs may be exempt from typical disclosure requirements.
For example, in Nevada, it is optional for foreclosures to have a Property Disclosure Statement,
a document that normally requires sellers to disclose any defects they are knowledgeable of.
By hiring B.R.A.I.N Inc / RJ and Associates, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Are REO properties a bargain in Coral Springs?
It's sometimes thought that any foreclosure must be a good buy and an opportunity for guaranteed profit. This isn't necessarily the case. You have to be prudent about buying a REO if your intent is to make money off of it. While it's true that the bank is usually eager to offload it quickly, they are also motivated to get as much as they can for it.
Look carefully at the listing and sales prices of competing homes in the neighborhood when considering the purchase of 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 flipping foreclosures. However there are also many REOs that are not good buys and may lose money.
Prepared to make an offer?
Most banks 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 typically 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 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 hidden damage and withdraw 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.
Once you've made your offer, you can expect the bank to make a counter offer. Then it will be your decision whether to accept their counter, or offer a counter to the counter offer.
Realize, you'll be working with a process that probably involves several people at the bank, and they don't work evenings or weekends. It's quite common for there to be days or even weeks of going back and forth. B.R.A.I.N Inc / RJ and Associates is accustomed to these situations and will work to ensure there are no undue delays.
10235 W. Sample Road, Suite 110, Coral Springs, FL 33065 Phone: Fax:
Look carefully at the listing and sales prices of competing homes in the neighborhood when considering the purchase of 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 flipping foreclosures. However there are also many REOs that are not good buys and may lose money.
