Buying REO Property or a Foreclosure in Tallahassee?
Smart consumers will turn to a seasoned pro when considering a foreclosed property.
What is an REO?
"REO" or Real Estate Owned are homes which have completed the foreclosure process that the bank or mortgage company now possesses. 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. The buyer must also be willing to pay with cash in hand. And on top of all that, you'll accept the property totally as is. That possibly could consist of prevailing liens and even current tenants that may require expulsion.
A bank-owned property, on the contrary, is a more tidy and attractive option. The REO property did not find a buyer during foreclosure auction. Now the bank owns it. The bank will take care of 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.
Do be aware that REOs may be exempt from typical disclosure requirements. For instance, in California, banks are exempt from giving a Transfer Disclosure Statement, a document that normally requires sellers to make known any defects they are knowledgeable of. By hiring Carey & Hart Realtors, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Am I assured a low price when purchasing a bank owned property in Tallahassee?
It's occasionally presumed that any REO must be a good buy and a chance for easy money. This simply isn't true. You have to be very careful about buying a REO if your intent is to make a profit. While it's true that the bank is often eager to offload it fast, they are also motivated to minimize any losses.
Look closely at the listing and sales prices of competing homes 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. 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 may lose money.
Ready to make an offer?
Most mortgage companies have staff dedicated to REO that you'll work with while buying REO property from them. Typically the REO department will use a listing agent to get their REO properties listed on the local MLS.
Prior to making your offer, we'll contact either the listing agent or REO department at the bank and find out as much as we can about the condition of the property and what their process is for getting offers. Since banks typically sell REO properties "as is", we'll want to be sure 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. Most offers cannot be made without this.
After you've made your offer, you can expect the bank to respond with a counter offer. From there it will be your choice whether to accept their counter, or make another counter offer. Be aware, you'll be working with a process that usually involves a group of 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. Carey & Hart Realtors is accustomed to these situations and will work to ensure there are no unnecessary delays. We have a successful track record of closing foreclosures/REOs and even short sales.