Interested in REO property or a foreclosure in Daytona Beach?
Purchasing 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 answer questions you have regarding real estate foreclosures.
What is an REO?
"REO" or Real Estate Owned are properties which have been foreclosed upon and are presently possessed by the bank or mortgage company. This is unlike 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 willing to pay with cash in hand. To top everything off, you'll accept the property completely as is. That could involve standing liens and even current occupants that need to be evicted.
A bank-owned property, on the other hand, is a more tidy and attractive option. The REO property didn't find a buyer during foreclosure auction. The bank now owns it. The bank will take care of the elimination of tax liens, evict occupants if needed and generally plan for the issuance of a title insurance policy to the buyer at closing.
Note that REOs may be exempt from standard disclosure requirements.
In California, for example, banks are not required to give a Transfer Disclosure Statement,
a document that usually requires sellers to reveal any defects they are aware of.
By hiring Arthur Middleton, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Are REO properties a bargain in Daytona Beach?
It's frequently believed that any foreclosure must be a steal and a chance for guaranteed profit. This simply isn't true. You have to be prudent about buying a REO if your intent is to make money. Even though the bank is often eager to offload it soon, they are also looking to minimize any losses.
When considering the value of a foreclosure, carefully analyze 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.
It is possible to find REOs with money-making potential, and many people do very well buying foreclosures. Still, there are also many REOs that are not good buys and may lose money.
Prepared to make an offer?
Most mortgage companies have a department dedicated to REO that you'll work with while buying REO property from them. To get their properties advertised on the local MLS, the lender will typically 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 what they know about the condition of the property and what their process is for taking offers. Since banks almost always 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 withdraw the offer if you find it.
As with making any offer on real estate, providing documentation of your ability to pay may make your offer more attractive, such as a pre-approval letter from a lender.
After you've presented your offer, you can expect the bank to respond with a counter offer. Then it will be your decision whether to accept their counter, or submit another counter offer.
Understand, you'll be dealing with a process that generally involves several 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.