Purchasing REO property or a foreclosure in Fayetteville?
Just as with any property purchase, your wisest 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 answer questions you have about real estate foreclosures.
What is an REO?
"REO" is an abbreviation for Real Estate Owned. These are houses which have been through foreclosure and are currently held by the bank or mortgage company. This is unlike 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 amassed during the foreclosure process. The buyer must also be able to pay with cash in hand. Finally, you'll receive the property 100% as is. That might involve standing liens and even current occupants that may require expulsion.
A bank-owned property, on the contrary, is a much neater and attractive option. The REO property didn't find a buyer during foreclosure auction. The bank now owns it. The bank will see to the removal of tax liens, evict occupants if needed and generally prepare for the issuance of a title insurance policy to the buyer at closing.
Do be aware that REOs may be exempt from normal disclosure requirements.
For example, in Texas, it is optional for foreclosures to have a Property Disclosure Statement,
a document that normally requires sellers to tell you about any defects of which they are aware.
By hiring Alotta Properties, Inc, you can rest assured knowing all parties are fulfilling North Carolina state disclosure requirements.
Am I guaranteed a low price when buying an REO property in Fayetteville?
It is commonly thought that any REO must be a good deal and a possibility for guaranteed profit. This isn't necessarily true. You have to be very careful about buying a repossession if your intent is to profit from the sale. While it's true that the bank is usually anxious to sell it fast, they are also looking to get as much as they can for it.
Look carefully at the listing and sales prices of similar homes in the neighborhood when considering the purchase of 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 and selling 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 staff dedicated to REO that you'll work with in buying REO property from them. To get their properties advertised on the local MLS, the lender will often contract with 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 usually sell REO properties "as is", you may want to include an inspection contingency in your offer that gives you time to check for unknown damage and cancel the offer if you find it.
If, as a buyer, you can provide documentation proving 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 made your offer, you can expect the bank to make 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 might 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. Alotta Properties, Inc is used to working around the schedules of this type of seller and will do everything possible to ensure there are no unnecessary delays.