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Making an offer on REO property or a foreclosure in Fredericksburg?
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Foreclosed upon and bank owned property purchases require the assistance of an experience professional.
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What's an REO?
"REO" or Real Estate Owned are houses which have been foreclosed upon that the bank or mortgage company currently owns. This is different than 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 accrued during the foreclosure process. The buyer must also be prepared to pay with cash in hand. Finally, you'll accept the property completely as is. That possibly will comprise of existing liens and even current tenants that need to be removed.
A bank-owned property, on the other hand, is a much neater and attractive deal. The REO property didn't find a buyer during foreclosure auction. The bank now owns it. The bank 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.
You should be aware that REOs may be exempt from typical disclosure requirements.
For example, in North Carolina, it is optional for foreclosures to have a Property Disclosure Statement,
a document that normally requires sellers to tell you about any defects they are informed of.
By hiring Nicholas Gombos Real Estate, you can rest assured knowing all parties are fulfilling Texas state disclosure requirements.
Are REO properties a bargain in Gillespie County?
It's sometimes assumed that any foreclosure must be a bargain and an opportunity for guaranteed profit. This simply isn't true. You have to be very careful about buying a REO if your intent is profit from the sale. While it's true that the bank is often eager to offload it soon, they are also looking to get as much as they can for it.
Look closely at the listing and sales prices of similar properties in the neighborhood when considering the purchase of an REO. And factor in any repairs or remodeling 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. Still there are also many REOs that are not good buys and not likely to turn a profit.
Time to make an offer?
Most lenders have a department dedicated to REO that you'll work with in buying REO property from them. Normally 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 concerning the condition of the property and what their process is for accepting offers. Since banks most commonly 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 hidden damage and retract the offer if you find it.
As with making any offer on real estate, providing documentation of your ability to secure financing may make your offer more attractive, such as a pre-approval letter from a lender.
Once you've presented your offer, you can expect the bank to respond with a counter offer. From there it will be your decision whether to accept their counter, or submit another counter offer.
Realize, you'll be working with a process that most likely involves a group of 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. Nicholas Gombos Real Estate is are used to working around the schedules of this type of seller and will do everything possible to ensure there are no unnecessary delays.
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