Making an offer on REO property or a foreclosure in Haines City?
Just as with any home purchase, your wisest move is to hire a professional real estate agent.
What is an REO?
"REO" or Real Estate Owned are houses which have been foreclosed upon and are currently owned 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 accrued during the foreclosure process. The buyer must also be able to pay with cash in hand. And on top of all that, you'll get the property entirely as is. That possibly will include current liens and even current residents that may require eviction.
A bank-owned property, conversely, is a more tidy and attractive option. The REO property was unable to find a buyer during foreclosure auction. The lender now owns it. The lender will see to 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 typical disclosure requirements.
For instance, in California, banks are exempt from giving a Transfer Disclosure Statement,
a document that ordinarily requires sellers to make known any defects they are aware of.
By hiring American Integrity Realty, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Is REO property in Haines City a bargain?
It is frequently thought that any REO must be a good buy and an opportunity for easy money. This isn't necessarily true. You have to be prudent about buying a repossession if your intent is to profit from the sale. Even though the bank is often anxious to offload it soon, they are also looking to get as much as they can for it.
When contemplating 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 buying and selling foreclosures. However, there are also many REOs that are not good buys and may not be money makers.
All set to make an offer?
Most lenders have a department dedicated to REO that you'll work with while buying REO property from them. Commonly the REO department will use a listing agent to get their REO properties listed on the local MLS.
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 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 unknown damage and withdraw 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 submitted your offer, you can expect the bank to make a counter offer. Then it will be your decision whether to accept their counter, or submit another counter offer.
Be aware, you'll be dealing with a process that probably involves a group of people at the bank, and they don't work evenings or weekends. It's typical for the process of offers and counter offers to take days or even weeks.