Buying REO property or a foreclosure in Venice?
Purchasing a bank-owned property is not something to be taken casually.
For more information, simply contact us
through our site or e-mail us
. We're glad to address questions you have about real estate foreclosures.
What is an REO?
"REO" stands for Real Estate Owned. These are properties which have gone through foreclosure that the bank or mortgage company now owns. This differs from 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 accept the property completely as is. That could involve existing liens and even current denizens that may require expulsion.
A bank-owned property, on the contrary, is a much neater and attractive deal. The REO property did not find a buyer during foreclosure auction. The bank 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.
Do be aware that REOs may be exempt from standard disclosure requirements.
For example, in Texas, it is optional for foreclosures to have a Property Disclosure Statement,
a document that ordinarily requires sellers to disclose any defects of which they are knowledgeable.
By hiring Bosshardt Realty Services, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Is REO property in Venice a bargain?
It's frequently presumed that any REO must be a good deal and a possibility for easy money. This frequently isn't true. You have to be very careful about buying a REO if your intent is to make money. Even though the bank is typically eager to offload it quickly, they are also looking to get as much as they can for it.
Look closely at the listing and sales prices of comparable 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.
There are bargains with potential to make money, and many people do very well buying and selling foreclosures. However, 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 while buying REO property from them. To get their properties advertised on the local MLS, the lender will usually 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 find out as much as you can about their knowledge about the condition of the property and what their process is for taking offers. Since banks most commonly sell REO properties "as is", you may want to include an inspection contingency in your offer that gives you time to check for unknown damage and cancel the offer if you find it.
If, as a buyer, you can provide documentation showing 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 up to you to decide whether to accept their counter, or offer a counter to the counter offer.
Your deal could be settled 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.