Making an offer on REO property or a foreclosure in Brooksville?
Making an offer on a bank-owned property is not something to be taken casually.
If you have any questions regarding real estate in Brooksville, Florida, call me or send me an e-mail.
What is an REO?
"REO" is Real Estate Owned. These are houses which have been foreclosed upon that the bank or mortgage company presently holds. This is different than 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 added during the foreclosure process. The buyer must also be willing to pay with cash in hand. And on top of all that, you'll receive the property totally as is. That possibly will comprise of current liens and even current tenants 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 lender will see to the removal of tax liens, evict occupants if needed and generally arrange 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 Nevada, it is optional for foreclosures to have a Property Disclosure Statement,
a document that typically requires sellers to disclose any defects they are knowledgeable of.
By hiring Joanne Fisher, GRI, SFR, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Are REO properties a bargain in Brooksville?
It's commonly presumed that any REO must be a good buy and a chance for guaranteed profit. This simply isn't true. You have to be cautious about buying a repossession if your intent is make money. Even though the bank is typically eager to sell it fast, they are also looking to get as much as they can for it.
Look carefully at the listing and sales prices of comparable 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. But there are also many REOs that are not good buys and not likely to turn a profit.
Time 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 frequently use 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 taking offers. Since banks almost always 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 hidden damage and terminate the offer if you find it.
If, as a buyer, you can provide documentation demonstrating your ability to secure financing, 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.)
After you've submitted your offer, it's customary for the bank to respond with a counter offer. At this point it will be your decision whether to accept their counter, or make another counter offer.
Your transaction might be settled in a single 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. Joanne Fisher, GRI, SFR is are used to working around the schedules of this type of seller and will do everything possible to ensure there are no unnecessary delays.
Look carefully at the listing and sales prices of comparable 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. But there are also many REOs that are not good buys and not likely to turn a profit.
SPIRIT
