Making an offer on REO property or a foreclosure in West Bridgewater?
Savvy consumers will turn to a seasoned pro when considering the purchase of a foreclosed property.
What's an REO?
"REO" is Real Estate Owned. These are homes which have gone through foreclosure that the bank or mortgage company currently possesses. This is unlike real estate up for foreclosure auction.
When buying 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. You must also be able to pay with cash in hand. Finally, you'll get the property entirely as is. That possibly will involve existing liens and even current occupants that need to be put out.
A bank-owned property, by contrast, is a much cleaner and attractive option. The REO property was unable to find a buyer during foreclosure auction. Now the bank owns it. The lender will handle the elimination of tax liens, evict occupants if needed and generally arrange for the issuance of a title insurance policy to the buyer at closing.
Take notice 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 ordinarily requires sellers to make known any defects they are informed of.
By hiring J Michael's Real Estate, LLC, you can rest assured knowing all parties are fulfilling Massachusetts state disclosure requirements.
Am I assured a bargain when purchasing an REO property in West Bridgewater?
It is occasionally thought that any REO must be a bargain and an opportunity for easy money. This often isn't true. You have to be very careful about buying a repossession if your intent is to make money off of it. While it's true that the bank is usually eager to sell it fast, they are also motivated to get as much as they can for it.
Look carefully at the listing and sales prices of comparable homes 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.
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 lose money.
Time to make an offer?
Most lenders have a department dedicated to REO that you'll work with when buying REO property from them. To get their properties advertised on the local MLS, the lender will usually 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 about the condition of the property and what their process is for accepting offers. Since banks almost always sell REO properties "as is", it may be in your best interest to include an inspection contingency in your offer that gives you time to check for unknown damage and retract the offer if you find it.
As with making any offer on real estate, providing documentation showing your ability to pay may make your offer more attractive, such as a pre-approval letter from a lender.
After you've made your offer, it's customary for the bank to make a counter offer. Then it will be your decision whether to accept their counter, or offer a counter to the counter offer.
Realize, you'll be contending with a process that most likely involves several people at the bank, and they don't work evenings or weekends. It's not unusual for the process of offers and counter offers to take days or even weeks. J Michael's Real Estate, LLC is accustomed to these situations and will work to ensure there are no unnecessary delays.