|
|
Making an offer on REO property or a foreclosure in Loma Linda?
 |
 |
 |
Savvy consumers will turn to a seasoned pro when considering a foreclosed property.
Should you have any questions about real estate in Loma Linda, California, call me or send me an e-mail.
|
|
|
|
 |
What's an REO?
"REO" is an abbreviation for Real Estate Owned. These are homes which have completed the foreclosure process that the bank or mortgage company now possesses. This differs from a property 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 ready to pay with cash in hand. And on top of all that, you'll get the property completely as is. That might include existing liens and even current occupants that need to be expelled.
A bank-owned property, on the contrary, is a more tidy and attractive transaction. The REO property was unable to find a buyer during foreclosure auction. The lender now owns it. The lender will attend to 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.
Note that REOs may be exempt from standard disclosure requirements.
For instance, in California, banks are not required to give a Transfer Disclosure Statement,
a document that typically requires sellers to tell you about any defects they are knowledgeable of.
By hiring University Realty, you can rest assured knowing all parties are fulfilling California state disclosure requirements.
Is REO property in Loma Linda a bargain?
It is frequently thought that any REO must be a good buy and a chance for guaranteed profit. This simply isn't true. You have to be very careful about buying a repossession if your intent is make money. While it's true that the bank is often eager to sell it promptly, they are also looking to get as much as they can for it.
When considering what to pay for a foreclosure, you need to look closely at 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 flipping foreclosures. Still there are also many REOs that are not good buys and may lose money.
Prepared to make an offer?
Most lenders have a department dedicated to REO that you'll work with in buying REO property from them. Commonly 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 their knowledge regarding the condition of the property and what their process is for receiving offers. Since banks usually 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 terminate the offer if you find it.
As with making any offer on real estate, you'll make your offer 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, you can expect the bank to counter offer. From there it will be your choice whether to accept their counter, or submit another counter offer.
Your deal could be settled in a single day, but that's rare. 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.
|
|
|