Purchasing REO property or a foreclosure in Monarch Beach?
Foreclosed upon and bank owned property purchases require the assistance of an experience professional.
For more information, simply contact me
through my site or e-mail me
. I'm happy to answer any questions you have about real estate foreclosures.
What's an REO?
"REO" means Real Estate Owned. These are homes which have been foreclosed upon that the bank or mortgage company presently possesses. 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 accrued during the foreclosure process. You 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 involve current liens and even current occupants that may require expulsion.
A bank-owned property, on the contrary, is a much neater and attractive transaction. The REO property didn't find a buyer during foreclosure auction. Now the bank owns it. The bank will deal with the removal of tax liens, evict occupants if needed and generally plan 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 North Carolina, it is optional for foreclosures to have a Property Disclosure Statement,
a document that normally requires sellers to tell you about any defects of which they are knowledgeable.
By hiring Marketa Musil - Berkshire Hathaway Home Services, California Properties, you can rest assured knowing all parties are fulfilling California state disclosure requirements.
Are REO properties a bargain in Monarch Beach?
It's commonly presumed that any REO must be a steal and an opportunity for guaranteed profit. This isn't always true. You have to be very careful about buying a repossession if your intent is to make money off of it. Even though the bank is typically eager to sell it quickly, they are also looking to get as much as they can for it.
Look carefully at the listing and sales prices of similar 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.
The bargains with money making potential exist, and many people do very well flipping foreclosures. However, there are also many REOs that are not good buys and may not be money makers.
Time to make an offer?
Most lenders have staff dedicated to REO that you'll work with when buying REO property from them. To get their properties advertised on the local MLS, the lender will usually contract with a listing agent.
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 concerning the condition of the property and what their process is for taking offers. Since banks most commonly 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.
As with making any offer on real estate, providing documentation proving 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 respond with a counter offer. Then it will be your choice whether to accept their counter, or submit another counter offer.
Your transaction might be settled in one day, but that's rare. 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.