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Interested in REO property or a foreclosure in Cornelius?
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Smart consumers will turn to a seasoned pro when considering the purchase of a foreclosed property.
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What is an REO?
"REO" stands for Real Estate Owned. These are properties which have completed the foreclosure process that the bank or mortgage company presently holds. 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 amassed during the foreclosure process. The buyer must also be willing to pay with cash in hand. And on top of all that, you'll accept the property 100% as is. That possibly could comprise of standing liens and even current occupants that need to be put out.
A bank-owned property, conversely, is a much cleaner and attractive transaction. The REO property was unable to find a buyer during foreclosure auction. The lender now owns it. The bank will attend to the elimination of tax liens, evict occupants if needed and generally organize for the issuance of a title insurance policy to the buyer at closing.
You should be aware 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 informed of.
By hiring Waterstone Realty, you can rest assured knowing all parties are fulfilling North Carolina state disclosure requirements.
Am I guaranteed a bargain when buying a bank owned property in Cornelius?
It is occasionally assumed that any REO must be a good deal and an opportunity for guaranteed profit. This isn't always the case. You have to be prudent about buying a REO if your intent is make a profit. Even though the bank is typically eager to offload it promptly, they are also motivated to minimize any losses.
Look closely at the listing and sales prices of competing properties 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.
The bargains with money making potential exist, and many people do very well flipping foreclosures. But there are also many REOs that are not good buys and may lose money.
Time to make an offer?
Most lenders have a department dedicated to REO that you'll work with in buying REO property from them. To get their properties advertised on the local MLS, the lender will typically hire a listing agent.
Prior to making your offer, you'll want to contact either the listing agent or REO department at the bank and learn as much as you can about what they know about the condition of the property and what their process is for taking offers. Since banks typically sell REO properties "as is", you may want to include an inspection contingency in your offer that gives you time to check for unseen damage and cancel the offer if you find it.
As with making any offer on real estate, providing documentation of your ability to pay may make your offer more attractive, such as a pre-approval letter from a lender.
After you've presented your offer, it's customary for the bank to make a counter offer. At this point it will be up to you to decide whether to accept their counter, or offer a counter to the counter offer.
Realize, you'll be dealing with a process that generally involves a group of people at the bank, and they don't work evenings or weekends. It's not unusual for there to be days or even weeks of negotiating back and forth. Waterstone Realty is are used to working around the schedules of this type of seller and will do everything possible to ensure there are no undue delays.
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