|
|
|
|
|
|
Buying REO property or a foreclosure in Washburn?
 |
 |
 |
Purchasing a bank-owned property is not something to be taken casually.
|
|
|
|
 |
What's an REO?
"REO" means Real Estate Owned. These are properties which have completed the foreclosure process and are now held by the bank or mortgage company. This is not the same as 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 accrued during the foreclosure process. The buyer must also be willing to pay with cash in hand. Finally, you'll get the property completely as is. That could comprise of standing liens and even current denizens that need to be thrown out.
A bank-owned property, by contrast, is a more tidy and attractive option. The REO property didn't find a buyer during foreclosure auction. The bank now 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.
Note that REOs may be exempt from normal disclosure requirements.
For example, in Nevada, it is optional for foreclosures to have a Property Disclosure Statement,
a document that typically requires sellers to make known any defects they are knowledgeable of.
By hiring Terri Misener, you can rest assured knowing all parties are fulfilling Wisconsin state disclosure requirements.
Is REO property in Washburn a bargain?
It's occasionally thought that any REO must be a steal and a chance for guaranteed profit. This frequently isn't true. You have to be cautious about buying a REO if your intent is make money. While it's true that the bank is typically eager to offload it fast, they are also looking to minimize any losses.
Look carefully at the listing and sales prices of competing properties 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.
It is possible to find REOs with money-making potential, and many people do very well buying foreclosures. Still there are also many REOs that are not good buys and not likely to turn a profit.
All set to make an offer?
Most mortgage companies have a department dedicated to REO that you'll work with when buying REO property from them. Normally the REO department will use a listing agent to get their REO properties listed on the local MLS.
Before making your offer, you'll want to contact either the listing agent or REO department at the bank and discover as much as you can about their knowledge regarding the condition of the property and what their process is for receiving 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 unknown damage and retract the offer if you find it.
If, as a buyer, you can provide documentation showing your ability to pay, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This is generally true for any real estate offer.)
Once you've made your offer, you can expect the bank to counter offer. From there it will be your decision whether to accept their counter, or offer a counter to the counter offer.
Your deal might be final in a single day, but that's usually not the case. Since offers and counter offers usually allow a day or more for the other party to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer.
|
|
|
|
|
