Buying REO property or a foreclosure in Winston Salem?
Smart consumers will turn to a seasoned pro when considering the purchase of a foreclosed property.
For more information, give us al call at (336)355-8910, or e-mail us
. We're glad to answer questions you have about real estate foreclosures.
What's an REO?
"REO" is an abbreviation for Real Estate Owned. These are homes which have completed the foreclosure process and are presently 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 willing to pay with cash in hand. Finally, you'll get the property completely as is. That could consist of prevailing liens and even current denizens that may require removal.
A bank-owned property, on the other hand, is a more tidy and attractive proposition. The REO property didn't find a buyer during foreclosure auction. The bank now owns it. The lender will deal with 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.
Note 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 reveal any defects they are aware of.
By hiring Hedrick Redfearn Street Real Estate, you can rest assured knowing all parties are fulfilling North Carolina state disclosure requirements.
Are REO properties a bargain in Winston Salem?
It's occasionally thought that any REO must be a good deal and a possibility for easy money. This isn't necessarily the case. You have to be very careful about buying a repossession if your intent is to make money. Even though the bank is typically eager to offload it quickly, they are also looking to get as much as they can for it.
When pondering 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.
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 not likely to turn a profit.
Ready to make an offer?
Most banks 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 frequently use 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 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", it's often prudent to include an inspection contingency in your offer that gives you time to check for hidden damage and retract 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, it's customary for the bank to counter offer. At this point it will be up to you to decide whether to accept their counter, or submit another counter offer.
Understand, you'll be working with a process that most likely involves several people at the bank, and they don't work evenings or weekends. It's quite common for the process of offers and counter offers to take days or even weeks.