Making an offer on REO property or a foreclosure in San Lorenzo?
Smart consumers will turn to a seasoned pro when considering a foreclosed property.
For more information, you can contact me through my site or e-mail me. I'm glad to address any questions you have regarding real estate foreclosures.
What is an REO?
"REO" or Real Estate Owned are properties which have been foreclosed upon that the bank or mortgage company presently owns. This is different than 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 prepared to pay with cash in hand. To top everything off, you'll accept the property totally as is. That possibly will comprise of prevailing liens and even current denizens that need to be thrown out.
A bank-owned property, conversely, is a more tidy and attractive option. The REO property didn't find a buyer during foreclosure auction. The lender now owns it. The lender will handle 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 are not required to give a Transfer Disclosure Statement,
a document that typically requires sellers to tell you about any defects they are aware of.
By hiring Bay Home Investments and Loans, you can rest assured knowing all parties are fulfilling California state disclosure requirements.
Are REO properties a bargain in San Lorenzo?
It is occasionally presumed that any foreclosure must be a good deal and an opportunity for easy money. This simply isn't true. You have to be cautious about buying a REO if your intent is make a profit. While it's true that the bank is typically anxious to sell it quickly, they are also motivated to minimize any losses.
Look carefully at the listing and sales prices of similar 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 flipping foreclosures. Still there are also many REOs that are not good buys and may not be money makers.
Time to make an offer?
Most mortgage companies have a department 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 usually contract with 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 their knowledge regarding the condition of the property and what their process is for accepting offers. Since banks usually 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 hidden damage and cancel 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 goes for any type of real estate offer.)
Once you've submitted your offer, you can expect the bank to make a 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 could be final 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. Bay Home Investments and Loans is accustomed to these situations and will work to ensure there are no unnecessary delays.
Bay Home Investments and Loans 17331 Hesperian Blvd. San Lorenzo, CA 94580
Look carefully at the listing and sales prices of similar 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 flipping foreclosures. Still there are also many REOs that are not good buys and may not be money makers.
