Interested in REO property or a foreclosure in Landrum?
Investing in a bank-owned property is not something to be taken lightly. For more information, simply contact us through our site or e-mail us. We're happy to answer any questions you have regarding real estate foreclosures.
What's an REO?
"REO" is an abbreviation for Real Estate Owned. These are houses which have gone through foreclosure and are presently owned by the bank or mortgage company. This is different than 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 added during the foreclosure process. The buyer must also be ready to pay with cash in hand. To top everything off, you'll accept the property 100% as is. That possibly could consist of prevailing liens and even current occupants that may require removal.
A bank-owned property, on the contrary, is a more tidy and attractive option. The REO property didn't find a buyer during foreclosure auction. Now the lender owns it. The bank will take care of the elimination of tax liens, evict occupants if needed and generally plan for the issuance of a title insurance policy to the buyer at closing.
You should be aware that REOs may be exempt from typical disclosure requirements. For example, in California, banks do not have to give a Transfer Disclosure Statement, a document that typically requires sellers to make known any defects they are informed of. By hiring Mickey Hambright, you can rest assured knowing all parties are fulfilling South Carolina state disclosure requirements.
Are REO properties a bargain in Landrum?
It is frequently assumed that any foreclosure must be a steal and a chance for guaranteed profit. This frequently isn't true. You have to be cautious about buying a REO if your intent is to profit from the sale. Even though the bank is usually anxious to offload it promptly, they are also motivated to minimize any losses.
Look carefully at the listing and sales prices of competing homes in the neighborhood when considering the purchase of an REO. And factor in any repairs or remodeling necessary to prepare the house for resale or moving in. The bargains with money making potential exist, and many people do very well flipping foreclosures. But, there are also many REOs that are not good buys and may lose money.
All set to make an offer?
Most banks 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 usually hire a listing agent.
Before making your offer, you'll want to contact either the listing agent or REO department at the bank and discover as much as you can about what they know concerning the condition of the property and what their process is for receiving 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 unseen damage and cancel the offer if you find it. As with making any offer on real estate, providing documentation of your ability to pay may make your offer more attractive, such as a pre-approval letter from a lender.
After you've submitted your offer, you can expect the bank to respond with a counter offer. From there it will be your decision whether to accept their counter, or offer a counter to the counter offer. Your transaction could be settled in a single day, but that's usually not the case. 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.