Looking for REO property or a foreclosure in Destin?
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Foreclosed upon and bank owned property purchases require the assistance of an experience professional. For more information, just contact me through my site or e-mail me. I'm glad to address any questions you have about real estate foreclosures. | ||
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What's an REO?
"REO" stands for Real Estate Owned. These are homes which have gone through foreclosure that the bank or mortgage company currently possesses. This is different than 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 added during the foreclosure process. The buyer must also be ready to pay with cash in hand. Finally, you'll accept the property entirely as is. That possibly could include standing liens and even current residents that may require removal.
A bank-owned property, by contrast, is a much cleaner and attractive proposition. The REO property was unable to find a buyer during foreclosure auction. The lender now owns it. The lender will take care of the removal of tax liens, evict occupants if needed and generally plan for the issuance of a title insurance policy to the buyer at closing.
Note that REOs may be exempt from normal disclosure requirements. In California, for example, banks are exempt from giving a Transfer Disclosure Statement, a document that ordinarily requires sellers to make known any defects they are aware of. By hiring BuyInDestin.com / Keller Williams Realty, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Is REO property in Destin a bargain?
It is sometimes thought that any foreclosure must be a steal and an opportunity for guaranteed profit. This isn't always true. You have to be prudent about buying a repossession if your intent is make a profit. Even though the bank is often anxious to sell it fast, they are also looking to get as much as they can for it.
When pondering what to pay for 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.
The bargains with money making potential exist, and many people do very well flipping foreclosures. However there are also many REOs that are not good buys and may not be money makers.
All set to make an offer?
Most mortgage companies have a department dedicated to REO that you'll work with while buying REO property from them. Typically the REO department will use a listing agent to get their REO properties listed on the local MLS.Prior to 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 their knowledge about the condition of the property and what their process is for accepting offers. Since banks most commonly 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, 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. At this point it will be up to you to decide whether to accept their counter, or offer a counter to the counter offer. Realize, you'll be working with a process that probably involves several people at the bank, and they don't work evenings or weekends. It's not unusual for there to be days or even weeks of going back and forth. BuyInDestin.com / Keller Williams Realty is are used to working around the schedules of this type of seller and will do everything possible to ensure there are no unnecessary delays.