Buying REO property or a foreclosure in Saint Augustine?
Savvy consumers will turn to a seasoned pro when considering a foreclosed property.
What is an REO?
"REO" or Real Estate Owned are houses which have been foreclosed upon that the bank or mortgage company currently owns. This is not the same as real estate 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 amassed during the foreclosure process. You must also be willing to pay with cash in hand. And on top of all that, you'll accept the property completely as is. That might include current liens and even current tenants that may require expulsion.
A bank-owned property, on the contrary, is a much neater and attractive transaction. The REO property was unable to find a buyer during foreclosure auction. Now the lender owns it. The bank will see to 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 California, banks are exempt from giving a Transfer Disclosure Statement,
a document that ordinarily requires sellers to tell you about any defects they are aware of.
By hiring Watson Realty Corp., you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Are REO properties a bargain in Saint Augustine?
It's sometimes assumed that any foreclosure must be a steal and a possibility for guaranteed profit. This isn't necessarily the case. You have to be prudent about buying a repossession if your intent is to make money off of it. Even though the bank is often anxious to sell it fast, they are also looking to minimize any losses.
When contemplating the value of 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.
It is possible to find REOs with money-making potential, and many people do very well buying foreclosures. However there are also many REOs that are not good buys and not likely to turn a profit.
All set to make an offer?
Most lenders have staff 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 often 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 find out 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 typically 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 unseen damage and terminate 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 submitted your offer, it's customary for the bank to counter offer. Then it will be your decision whether to accept their counter, or offer a counter to the counter offer.
Your deal could be final in a single day, but that's rare. Since offers and counter offers usually give the other party a day or longer to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer.
* MOL = More or Less
Watson Realty Corp. 175 Hampton Point Drive Saint Augustine, FL 32092-1055
When contemplating the value of 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.
It is possible to find REOs with money-making potential, and many people do very well buying foreclosures. However there are also many REOs that are not good buys and not likely to turn a profit.
