Interested in REO property or a foreclosure in Huntsville?
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 happy to address any questions you have about real estate foreclosures.
What is an REO?
"REO" or Real Estate Owned are properties which have been foreclosed upon and are presently owned by the bank or mortgage company. 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 accrued during the foreclosure process. You must also be ready to pay with cash in hand. Finally, you'll get the property 100% as is. That could comprise of standing liens and even current residents that may require expulsion.
A bank-owned property, on the contrary, is a more tidy and attractive option. The REO property was unable to find a buyer during foreclosure auction. Now the lender owns it. The bank will see to the elimination of tax liens, evict occupants if needed and generally organize for the issuance of a title insurance policy to the buyer at closing.
You should be aware that REOs may be exempt from normal disclosure requirements.
For example, in California, banks are not required to give a Transfer Disclosure Statement,
a document that typically requires sellers to reveal any defects they are informed of.
By hiring Rosenblum Realty, Inc, you can rest assured knowing all parties are fulfilling Alabama state disclosure requirements.
Am I assured a low price when investing in an REO property in Huntsville?
It is occasionally thought that any foreclosure must be a good deal and a chance for easy money. This isn't always true. You have to be very careful about buying a REO if your intent is to profit from the sale. Even though the bank is typically eager to sell it fast, they are also looking to minimize any losses.
Look closely at the listing and sales prices of competing 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.
It is possible to find REOs with money-making potential, and many people do very well buying foreclosures. Still, there are also many REOs that are not good buys and not likely to turn a profit.
Prepared to make an offer?
Most lenders have a department dedicated to REO that you'll work with when buying REO property from them. To get their properties advertised on the local MLS, the lender will often hire a listing agent.
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", it's often prudent to include an inspection contingency in your offer that gives you time to check for unseen damage and withdraw the offer if you find it.
As with making any offer on real estate, your offer may be more attractive if you can include documentation of your ability to pay, such as a pre-approval letter from a lender.
Once you've presented your offer, it's customary for the bank to respond with a counter offer. From there it will be your choice whether to accept their counter, or submit another counter offer.
Be aware, you'll be working with a process that most likely involves several people at the bank, and they don't work evenings or weekends. It's quite common for the process of offers and counter offers to take days or even weeks. Rosenblum Realty, Inc is used to working around the schedules of this type of seller and will do everything possible to ensure there are no undue delays.