|
|
|
|
Interested in REO property or a foreclosure in Flat Rock?
 |
 |
 |
Smart consumers will turn to a seasoned pro when considering the purchase of a foreclosed property.
For more information, just contact me through my site or e-mail me. I'm glad to answer questions you have about real estate foreclosures.
|
|
|
|
 |
What is an REO?
"REO" means Real Estate Owned. These are homes which have completed the foreclosure process and are currently owned by the bank or mortgage company. 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 able to pay with cash in hand. And on top of all that, you'll receive the property totally as is. That could consist of existing liens and even current residents that may require eviction.
A bank-owned property, by contrast, is a more tidy and attractive proposition. The REO property didn't find a buyer during foreclosure auction. The bank now owns it. The lender will handle 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.
Do be aware that REOs may be exempt from normal disclosure requirements.
For example, in Texas, it is optional for foreclosures to have a Property Disclosure Statement,
a document that normally requires sellers to make known any defects they are knowledgeable of.
By hiring Home Source Property Management, Inc., you can rest assured knowing all parties are fulfilling Michigan state disclosure requirements.
Am I assured a low price when investing in an REO property in Flat Rock?
It's occasionally presumed that any foreclosure must be a steal and an opportunity for easy money. This isn't necessarily the case. You have to be cautious about buying a repossession if your intent is to make money off of it. Even though 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 comparable homes in the neighborhood when considering the purchase of an REO. And factor in any repairs or upgrades 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 flipping foreclosures. However there are also many REOs that are not good buys and may lose money.
Ready to make an offer?
Most banks have staff dedicated to REO that you'll work with when buying REO property from them. Typically the REO department will use a listing agent to get their REO properties listed on the local MLS.
Before 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 their knowledge regarding the condition of the property and what their process is for getting offers. Since banks typically 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 withdraw the offer if you find it.
As with making any offer on real estate, you'll make your offer more attractive if you can include documentation of your ability to pay, such as a pre-approval letter from a lender.
After you've made your offer, you can expect the bank to respond with a counter offer. Then it will be your decision whether to accept their counter, or make another counter offer.
Your transaction might be final in a single 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.
|
|
|
|
