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Interested in REO property or a foreclosure in Venice?
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Just as with any home purchase, your smartest move is to hire a professional real estate agent.
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What is an REO?
"REO" or Real Estate Owned are houses which have been foreclosed upon and are now owned by the bank or mortgage company. This differs from 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 accumulated during the foreclosure process. You must also be prepared to pay with cash in hand. To top everything off, you'll accept the property entirely as is. That possibly could consist of current liens and even current occupants that need to be put out.
A bank-owned property, conversely, is a much cleaner and attractive proposition. The REO property was unable to find a buyer during foreclosure auction. Now the lender owns it. The lender will handle the removal 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 normal disclosure requirements.
For example, in California, banks are not required to give a Transfer Disclosure Statement,
a document that usually requires sellers to disclose any defects of which they are knowledgeable.
By hiring Alice Salaices - Realtor, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Am I guaranteed a bargain when investing in a bank owned property in Venice?
It's frequently thought that any foreclosure must be a steal and an opportunity for easy money. This isn't always the case. You have to be cautious about buying a REO if your intent is make money. While it's true that the bank is usually anxious to sell it soon, they are also looking to minimize any losses.
When pondering what to pay for REO property, 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.
The bargains with money making potential exist, 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.
Time 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 concerning the condition of the property and what their process is for getting offers. Since banks almost always 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 unseen damage and withdraw the offer if you find it.
As with making any offer on real estate, your offer may be 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 respond with a counter offer. From there it will be your decision whether to accept their counter, or submit another counter offer.
Realize, you'll be working with a process that probably 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. Alice Salaices - Realtor is are used to working around the schedules of this type of seller and will do everything possible to ensure there are no undue delays.
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