Making an offer on REO property or a foreclosure in Tryon?
Just as with any property purchase, your wisest move is to hire a professional real estate agent.
For more information, simply contact me
through my site or e-mail me
. I'm happy to answer questions you have about real estate foreclosures.
What's an REO?
"REO" or Real Estate Owned are homes which have been foreclosed upon and are now owned by the bank or mortgage company. This is different than a property 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 ready to pay with cash in hand. To top everything off, you'll accept the property 100% as is. That could comprise of current liens and even current tenants that need to be expelled.
A bank-owned property, by contrast, is a much neater and attractive deal. The REO property was unable to find a buyer during foreclosure auction. The lender now owns it. The bank will deal with the removal 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 typical disclosure requirements.
For example, in Nevada, it is optional for foreclosures to have a Property Disclosure Statement,
a document that ordinarily requires sellers to reveal any defects of which they are aware.
By hiring RE/MAX Advantage Realty, you can rest assured knowing all parties are fulfilling North Carolina state disclosure requirements.
Is REO property in Tryon a bargain?
It is occasionally assumed that any foreclosure must be a good deal and an opportunity for guaranteed profit. This isn't always true. You have to be cautious about buying a REO if your intent is to make a profit. While it's true that the bank is typically eager to sell it fast, they are also motivated to get as much as they can for it.
Look closely 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.
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.
Time to make an offer?
Most banks have a department dedicated to REO that you'll work with while buying REO property from them. Commonly the REO department will use a listing agent to get their REO properties listed on the local MLS.
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 concerning the condition of the property and what their process is for taking offers. Since banks usually 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, providing documentation showing your ability to secure financing may make your offer more attractive, such as a pre-approval letter from a lender.
After you've presented your offer, you can expect the bank to counter offer. Then it will be your decision whether to accept their counter, or submit another counter offer.
Understand, you'll be dealing with a process that generally involves multiple people at the bank, and they don't work evenings or weekends. It's quite common for there to be days or even weeks of going back and forth.