Purchasing REO property or a foreclosure in New Port Richey?
Savvy consumers will turn to a seasoned pro when considering a foreclosed property. For more information, you can contact us
through our site or e-mail us
. We're glad to address questions you have about real estate foreclosures.
What is an REO?
"REO" is Real Estate Owned. These are houses which have been foreclosed upon and are currently possessed 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 accrued during the foreclosure process. You must also be ready to pay with cash in hand. Finally, you'll get the property 100% as is. That could consist of prevailing liens and even current residents that may require eviction.
A bank-owned property, on the contrary, is a much cleaner and attractive proposition. The REO property did not find a buyer during foreclosure auction. Now the lender owns it. The bank will handle the removal of tax liens, evict occupants if needed and generally prepare for the issuance of a title insurance policy to the buyer at closing.
You should be aware that REOs may be exempt from normal disclosure requirements. For example, in Texas, it is optional for foreclosures to have a Property Disclosure Statement, a document that normally requires sellers to disclose any defects they are knowledgeable of. By hiring Equity Partners Real Estate, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Am I assured a bargain when buying an REO property in New Port Richey?
It's frequently assumed that any REO must be a good deal and an opportunity for easy money. This simply isn't true. You have to be cautious about buying a REO if your intent is to profit from the sale. Even though the bank is typically anxious to sell it soon, they are also motivated to get as much as they can for it.
Look carefully 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 upgrades 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 foreclosures. But, there are also many REOs that are not good buys and not likely to turn a profit.
Ready to make an offer?
Most mortgage companies have a department dedicated to REO that you'll work with in buying REO property from them. Commonly 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 find out as much as you can about what they know about 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 unknown damage and cancel the offer if you find it. As with making any offer on real estate, providing documentation showing your ability to pay may make your offer more attractive, such as a pre-approval letter from a lender.
After you've made your offer, it's customary for the bank to respond with a counter offer. At this point it will be up to you to decide whether to accept their counter, or submit another counter offer. Your transaction might be settled in one day, but that's rare. Since offers and counter offers usually allow a day or more for the other party to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer. Equity Partners 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.