CHOICE REALTY Carolmac & Co., Inc.
CHOICE REALTY Carolmac & Co., Inc.
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9 Steps to Owning
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Writing the Offer
Why an inspection?
Short Sale Buyer
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Reasons Homes Don't Sell
Short Sale Seller
Setting the Sales Price
Buying REO property or a foreclosure in Brandon?
Purchasing a bank-owned property is not something to be taken lightly. Should you have any questions about real estate in Brandon, Florida,
send me an e-mail
What is an REO?
"REO" is Real Estate Owned. These are houses which have gone through foreclosure and are currently held by the bank or mortgage company. 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. You must also be prepared to pay with cash in hand. And on top of all that, you'll accept the property totally as is. That could consist of prevailing liens and even current residents that need to be evicted.
A bank-owned property, conversely, is a much cleaner and attractive transaction. The REO property was unable to find a buyer during foreclosure auction. Now the lender owns it. The lender will take care of 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.
Take notice that REOs may be exempt from standard disclosure requirements. For example, in Nevada, it is optional for foreclosures to have a Property Disclosure Statement, a document that normally requires sellers to reveal any defects they are informed of. By hiring CHOICE REALTY Carolmac & Co. Carolmac & Co., Inc., you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Are REO properties a bargain in Brandon?
It's frequently assumed that any foreclosure must be a good buy and a chance for guaranteed profit. This isn't necessarily the case. You have to be cautious about buying a repossession if your intent is make a profit. Even though the bank is often anxious to offload it promptly, they are also motivated to get as much as they can for it.
Look closely 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 remodeling 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. But there are also many REOs that are not good buys and may not be money makers.
All set to make an offer?
Most banks have a department 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 usually hire 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 what they know concerning the condition of the property and what their process is for receiving offers. Since banks usually 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 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 goes for any type of real estate offer.)
After you've made your offer, you can expect the bank to respond with a counter offer. At this point it will be your decision whether to accept their counter, or make another counter offer. Be aware, you'll be working with a process that generally involves a group of people at the bank, and they don't work evenings or weekends. It's not unusual for there to be days or even weeks of negotiating back and forth. CHOICE REALTY Carolmac & Co. Carolmac & Co., Inc. is are used to working around the schedules of this type of seller and will do everything possible to ensure there are no undue delays.