Making an offer on REO property or a foreclosure in Port St Lucie or the Treasure Coast?
|Smart consumers will turn to a seasoned pro when considering a foreclosed property.|
What's an REO?"REO" or Real Estate Owned are homes which have completed the foreclosure process and are presently held by the bank or mortgage company. This is unlike 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 able to pay with cash in hand. Finally, you'll get the property 100% as is. That possibly could involve current liens and even current tenants that may require expulsion.
A bank-owned property, by contrast, is a much cleaner and attractive transaction. The REO property was unable to find a buyer during foreclosure auction. Now the bank owns it. The lender will deal with the elimination of tax liens, evict occupants if needed and generally prepare for the issuance of a title insurance policy to the buyer at closing.
Note 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 typically requires sellers to reveal any defects of which they are aware. By hiring FEDEN Healthcare Education Institute, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Is REO property in Port St Lucie a bargain?It's sometimes assumed that any foreclosure must be a good buy and a chance for easy money. This simply isn't true. You have to be very careful about buying a repossession if your intent is to make money off of it. While it's true that the bank is often eager to offload it soon, they are also motivated to get as much as they can for it.
Look carefully at the listing and sales prices of similar homes in the neighborhood when making an offer on an REO. And factor in any repairs or upgrades necessary to prepare the house for resale or moving in. There are bargains with potential to make money, and many people do very well flipping foreclosures. Still, there are also many REOs that are not good buys and not likely to turn a profit.
Ready to make an offer?Most lenders have a department dedicated to REO that you'll work with when buying REO property from them. Commonly 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 about the condition of the property and what their process is for receiving offers. Since banks almost always 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 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 submitted your offer, you can expect the bank to make a counter offer. From there it will be your choice whether to accept their counter, or offer a counter to the counter offer. Understand, you'll be working with a process that generally involves a group of people at the bank, and they don't work evenings or weekends. It's typical for there to be days or even weeks of negotiating back and forth.