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Purchasing REO property or a foreclosure in Crofton?
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Just as with any property purchase, your smartest move is to hire a professional real estate agent.
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.
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What is an REO?
"REO" is short for Real Estate Owned. These are homes which have completed the foreclosure process that the bank or mortgage company currently holds. This differs from a property 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 amassed 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 entirely as is. That could involve current liens and even current occupants that need to be evicted.
A bank-owned property, by contrast, is a more tidy and attractive option. The REO property didn't find a buyer during foreclosure auction. The bank now owns it. The bank will take care of the removal of tax liens, evict occupants if needed and generally organize for the issuance of a title insurance policy to the buyer at closing.
Take notice that REOs may be exempt from standard disclosure requirements.
For example, in Nevada, it is optional for foreclosures to have a Property Disclosure Statement,
a document that normally requires sellers to make known any defects they are informed of.
By hiring Client First Real Estate, you can rest assured knowing all parties are fulfilling Maryland state disclosure requirements.
Am I assured a good deal when investing in an REO property in Crofton?
It's occasionally thought that any foreclosure must be a bargain and a chance for guaranteed profit. This isn't necessarily true. You have to be prudent about buying a repossession if your intent is make money. Even though the bank is usually anxious to sell it promptly, they are also motivated to get as much as they can for it.
When considering the value of a foreclosure, 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 buying foreclosures. But 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 while buying REO property from them. To get their properties advertised on the local MLS, the lender will typically contract with a listing agent.
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 what they know regarding the condition of the property and what their process is for accepting offers. Since banks usually 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 retract 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.
Once you've submitted your offer, you can expect the bank to counter offer. From there it will be your choice whether to accept their counter, or offer a counter to the counter offer.
Be aware, you'll be dealing with a process that most likely involves a group of people at the bank, and they don't work evenings or weekends. It's quite common for there to be days or even weeks of going back and forth.
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Today's Rates:
| 30-yr Fixed | 3.87% | 4% | | 15-yr Fixed | 3.14% | 3.31% | | 1-yr Adj | 2.76% | 3.42% |
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