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Buying REO property or a foreclosure in West Palm Beach?
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Foreclosed upon and bank owned property purchases require the assistance of an experience professional.
For more information, you can contact me through my site or e-mail me. I'm happy to answer questions you have about real estate foreclosures.
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What's an REO?
"REO" is short for Real Estate Owned. These are properties which have gone through foreclosure that the bank or mortgage company currently holds. 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 accrued during the foreclosure process. You must also be willing to pay with cash in hand. To top everything off, you'll get the property entirely as is. That possibly may comprise of existing liens and even current occupants that may require expulsion.
A bank-owned property, on the other hand, is a more tidy and attractive proposition. The REO property didn't find a buyer during foreclosure auction. The bank now owns it. The bank will deal with 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.
Do be aware that REOs may be exempt from standard disclosure requirements.
In California, for example, banks do not have to give a Transfer Disclosure Statement,
a document that normally requires sellers to make known any defects they are knowledgeable of.
By hiring REMAX Prestige Realty, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Am I guaranteed a good deal when purchasing an REO property in West Palm Beach?
It is occasionally thought that any REO must be a good deal and a chance for easy money. This isn't necessarily true. 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.
Look carefully at the listing and sales prices of comparable properties in the neighborhood when making an offer on 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. However there are also many REOs that are not good buys and not likely to turn a profit.
Time to make an offer?
Most mortgage companies have staff 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 often hire 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 their knowledge regarding the condition of the property and what their process is for getting 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.
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 made your offer, it's customary for the bank to respond with a counter offer. At this point it will be your choice whether to accept their counter, or offer a counter to the counter offer.
Be aware, you'll be working with a process that probably involves several people at the bank, and they don't work evenings or weekends. It's quite common for the process of offers and counter offers to take days or even weeks.
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Today's Rates:
| 30-yr Fixed | 3.87% | 4% | | 15-yr Fixed | 3.16% | 3.33% | | 1-yr Adj | 2.78% | 3.45% |
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