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Purchasing REO property or a foreclosure in Litchfield Park?
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Investing in a bank-owned property is not something to be taken lightly.
For more information, you can contact me through my site or e-mail me. I'm happy to address questions you have regarding real estate foreclosures.
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What's an REO?
"REO" or Real Estate Owned are properties which have completed the foreclosure process that the bank or mortgage company now 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 added during the foreclosure process. The buyer must also be ready to pay with cash in hand. To top everything off, you'll accept the property 100% as is. That possibly could comprise of standing liens and even current tenants that need to be thrown out.
A bank-owned property, on the other hand, is a much neater and attractive option. The REO property was unable to find a buyer during foreclosure auction. Now the lender owns it. The lender will handle the elimination 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 Texas, it is optional for foreclosures to have a Property Disclosure Statement,
a document that typically requires sellers to tell you about any defects of which they are informed.
By hiring Home Execs Realty, you can rest assured knowing all parties are fulfilling Arizona state disclosure requirements.
Is REO property in Litchfield Park a bargain?
It's occasionally believed that any foreclosure must be a good buy and a possibility for easy money. This isn't always true. You have to be prudent about buying a REO if your intent is to make money off of it. Even though the bank is typically eager to offload it soon, they are also looking to minimize any losses.
Look closely at the listing and sales prices of competing 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.
There are bargains with potential to make money, and many people do very well buying foreclosures. However there are also many REOs that are not good buys and may not be money makers.
Time 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 frequently use a listing agent.
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 taking offers. Since banks typically sell REO properties "as is", it's often prudent 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.
As with making any offer on real estate, you'll make your offer more attractive if you can include documentation of your ability to pay, such as a pre-approval letter from a lender.
After you've presented your offer, it's customary for the bank to make a counter offer. At this point it will be your decision whether to accept their counter, or submit another counter offer.
Realize, you'll be contending with a process that most likely 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 going back and forth.
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