Purchasing REO property or a foreclosure in Anaconda?
|Smart consumers will turn to a seasoned pro when considering a foreclosed property.|
What is an REO?"REO" or Real Estate Owned are properties which have been foreclosed upon that the bank or mortgage company presently owns. This differs from 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 accumulated during the foreclosure process. The buyer must also be prepared to pay with cash in hand. Finally, you'll receive the property 100% as is. That possibly could comprise of standing liens and even current denizens that need to be expelled.
A bank-owned property, by contrast, is a much neater and attractive deal. The REO property was unable to find a buyer during foreclosure auction. Now the bank owns it. The bank will deal with 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. For example, in California, banks are exempt from giving a Transfer Disclosure Statement, a document that typically requires sellers to make known any defects they are knowledgeable of. By hiring Shamrock Real Estate, you can rest assured knowing all parties are fulfilling Montana state disclosure requirements.
Am I assured a good deal when purchasing an REO property in Anaconda?It is occasionally believed that any REO must be a steal and an opportunity for guaranteed profit. This isn't necessarily the case. You have to be very careful about buying a REO if your intent is profit from the sale. Even though the bank is usually anxious to sell it fast, they are also looking to minimize any losses.
Look closely at the listing and sales prices of competing properties 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 buying and selling foreclosures. However there are also many REOs that are not good buys and may lose money.
Prepared to make an offer?Most mortgage companies have staff dedicated to REO that you'll work with in 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 learn as much as you can about what they know about the condition of the property and what their process is for getting offers. Since banks typically sell REO properties "as is", you'll want to be sure and include an inspection contingency in your offer that gives you time to check for hidden damage and cancel the offer if you find it. If, as a buyer, you can provide documentation showing your ability to pay, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This holds for any type of real estate offer.)
After you've submitted your offer, you can expect the bank to make a counter offer. Then it will be your choice whether to accept their counter, or offer a counter to the counter offer. Your deal might be settled in one day, but that's usually not the case. Since offers and counter offers usually allow a day or more for the other party to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer.