Purchasing REO property or a foreclosure in Sarasota?
Investing in a bank-owned property is not something to be taken lightly.
What is an REO?
"REO" or Real Estate Owned are homes which have gone through foreclosure that the bank or mortgage company presently holds. This is unlike real estate 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 prepared to pay with cash in hand. Finally, you'll receive the property completely as is. That possibly may consist of standing liens and even current denizens that need to be thrown out.
A bank-owned property, on the other hand, is a much cleaner and attractive proposition. The REO property didn't find a buyer during foreclosure auction. Now the lender owns it. The lender will attend to the elimination of tax liens, evict occupants if needed and generally arrange for the issuance of a title insurance policy to the buyer at closing.
Take notice that REOs may be exempt from typical disclosure requirements.
For example, in Nevada, it is optional for foreclosures to have a Property Disclosure Statement,
a document that normally requires sellers to make known any defects of which they are informed.
By hiring Your Global Agents - Coldwell Banker Real Estate, 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 Sarasota?
It's occasionally thought that any foreclosure must be a good deal and a chance for easy money. This isn't always true. You have to be cautious about buying a REO if your intent is make a profit. Even though the bank is often anxious to offload it quickly, they are also motivated to minimize any losses.
When considering the value of REO property, 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 and selling foreclosures. However there are also many REOs that are not good buys and may lose money.
Time to make an offer?
Most mortgage companies have staff dedicated to REO that you'll work with when buying REO property from them. To get their properties advertised on the local MLS, the lender will usually contract with a listing agent.
Before making your offer, you'll want to contact either the listing agent or REO department at the bank and discover as much as you can about their knowledge concerning the condition of the property and what their process is for accepting 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 unseen damage and terminate the offer if you find it.
If, as a buyer, you can provide documentation demonstrating your ability to secure financing, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This goes for any real estate offer.)
After you've made your offer, it's customary for the bank to make a counter offer. From there it will be your decision whether to accept their counter, or make another counter offer.
Understand, you'll be working with a process that most likely involves several people at the bank, and they don't work evenings or weekends. It's not uncommon for there to be days or even weeks of negotiating back and forth. Your Global Agents - Coldwell Banker Real Estate is accustomed to these situations and will work to ensure there are no unnecessary delays.
Your Global Agents - Coldwell Banker Real Estate 400 St. Armands Cir Sarasota, FL 34236
When considering the value of REO property, 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 and selling foreclosures. However there are also many REOs that are not good buys and may lose money.