Interested in REO property or a foreclosure in Blacksburg?
Savvy consumers will turn to a seasoned pro when considering a foreclosed property.
For more information, just contact me
through my site or e-mail me
. I'm glad to address any questions you have regarding real estate foreclosures.
What's an REO?
"REO" or Real Estate Owned are properties which have completed the foreclosure process that the bank or mortgage company presently holds. This differs from a property 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 accrued during the foreclosure process. You must also be ready to pay with cash in hand. Finally, you'll get the property entirely as is. That could comprise of current liens and even current denizens that need to be put out.
A bank-owned property, by contrast, is a much cleaner and attractive deal. The REO property didn't find a buyer during foreclosure auction. Now the lender owns it. The lender 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.
Do be aware that REOs may be exempt from typical disclosure requirements.
For example, in Texas, 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 informed.
By hiring RE/MAX 8, you can rest assured knowing all parties are fulfilling Virginia state disclosure requirements.
Are REO properties a bargain in Blacksburg?
It is sometimes believed 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 repossession if your intent is to make money. While it's true that the bank is often anxious to sell it quickly, they are also looking to minimize any losses.
When contemplating what to pay for REO property, carefully analyze comparable sales in the neighborhood and be sure to take into account the time and cost of any repairs or remodeling needed to prepare the house for resale.
There are bargains with potential to make money, 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. Normally 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 find out as much as you can about their knowledge about the condition of the property and what their process is for getting 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 hidden 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 holds for any real estate offer.)
After you've presented your offer, you can expect the bank to respond with a counter offer. At this point it will be your choice whether to accept their counter, or submit another counter offer.
Understand, you'll be dealing with a process that most likely involves several people at the bank, and they don't work evenings or weekends. It's not uncommon for the process of offers and counter offers to take days or even weeks.