Looking for REO property or a foreclosure in Sandy?
Smart consumers will turn to a seasoned pro when considering the purchase of a foreclosed property.
What's an REO?
"REO" or Real Estate Owned are homes which have completed the foreclosure process that the bank or mortgage company currently possesses. This differs from 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 added 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 completely as is. That may consist of existing liens and even current tenants that may require removal.
A bank-owned property, by contrast, is a much cleaner and attractive deal. The REO property didn't find a buyer during foreclosure auction. The bank now owns it. The lender will take care of the elimination of tax liens, evict occupants if needed and generally prepare 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 North Carolina, 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 Utah Real Estate RealtyPath Platinum Real Estate , you can rest assured knowing all parties are fulfilling Utah state disclosure requirements.
Are REO properties a bargain in Sandy?
It's occasionally assumed that any foreclosure must be a good deal and a chance for easy money. This isn't always the case. You have to be cautious about buying a REO if your intent is to make money. While it's true that the bank is usually anxious to sell it soon, they are also looking to get as much as they can for it.
Look closely at the listing and sales prices of comparable properties in the neighborhood when considering the purchase of 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 buying foreclosures. Still, there are also many REOs that are not good buys and not likely to turn a profit.
Prepared 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 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 find out 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 typically 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 cancel the offer if you find it. If, as a buyer, you can provide documentation demonstrating your ability to secure financing, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This holds for any real estate offer.)
Once you've submitted your offer, you can expect the bank to counter offer. From there it will be your decision whether to accept their counter, or offer a counter to the counter offer. Be aware, you'll be dealing with a process that generally involves multiple 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 going back and forth. Utah Real Estate RealtyPath Platinum Real Estate is used to working around the schedules of this type of seller and will do everything possible to ensure there are no undue delays.