Interested in REO property or a foreclosure in Clermont?
Investing in a bank-owned property is not something to be taken lightly.
For more information, simply contact us
through our site or e-mail us
. We're happy to address questions you have about real estate foreclosures.
What is an REO?
"REO" stands for Real Estate Owned. These are homes which have been foreclosed upon and are presently held by the bank or mortgage company. This is different than 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 accumulated during the foreclosure process. You must also be prepared to pay with cash in hand. And on top of all that, you'll get the property completely as is. That might comprise of standing liens and even current residents that need to be kicked out.
A bank-owned property, on the other hand, is a more tidy and attractive proposition. The REO property did not find a buyer during foreclosure auction. The lender now owns it. The lender will take care of 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 instance, in California, banks are exempt from giving a Transfer Disclosure Statement,
a document that normally requires sellers to tell you about any defects they are knowledgeable of.
By hiring Southern Prestige Realty, Inc., you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Are REO properties a bargain in Clermont?
It is occasionally believed that any foreclosure must be a bargain and a possibility for guaranteed profit. This isn't necessarily the case. You have to be very careful about buying a repossession if your intent is to make money. Even though the bank is typically eager to sell it promptly, they are also motivated to minimize any losses.
Look closely 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 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. However, there are also many REOs that are not good buys and not likely to turn a profit.
Ready to make an offer?
Most mortgage companies have staff dedicated to REO that you'll work with in buying REO property from them. Typically 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 find out as much as you can about their knowledge concerning the condition of the property and what their process is for receiving offers. Since banks typically sell REO properties "as is", it may be in your best interest to include an inspection contingency in your offer that gives you time to check for unknown damage and retract 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, you can expect the bank to respond with a counter offer. From there it will be up to you to decide whether to accept their counter, or submit another counter offer.
Be aware, you'll be working with a process that most likely involves multiple 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.