Purchasing REO property or a foreclosure in Glenville?
Just as with any property purchase, your wisest move is to hire a professional real estate agent.
What is an REO?
"REO" or Real Estate Owned are homes which have gone through foreclosure and are presently owned by the bank or mortgage company. This is different than 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 accumulated 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 possibly may include current liens and even current occupants that need to be evicted.
A bank-owned property, by contrast, is a much neater and attractive transaction. The REO property was unable to find a buyer during foreclosure auction. The bank now owns it. The lender will deal with 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 normal disclosure requirements. For example, in North Carolina, it is optional for foreclosures to have a Property Disclosure Statement, a document that ordinarily requires sellers to tell you about any defects they are knowledgeable of. By hiring Jim Lewis Realty, you can rest assured knowing all parties are fulfilling North Carolina state disclosure requirements.
Is REO property in Glenville a bargain?
It is sometimes believed that any foreclosure must be a steal and an opportunity for guaranteed profit. This isn't necessarily true. You have to be cautious about buying a REO if your intent is make money. Even though the bank is typically anxious to sell it promptly, they are also motivated to minimize any losses.
Look carefully at the listing and sales prices of similar homes in the neighborhood when considering the purchase of an REO. And factor in any repairs or remodeling 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 and selling foreclosures. However there are also many REOs that are not good buys and not likely to turn a profit.
Prepared to make an offer?
Most banks 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 frequently use a listing agent.
Prior to making your offer, I will want to contact either the listing agent or REO department at the bank for you and find out as much as you can about their knowledge concerning the condition of the property and what their process is for taking offers. Since banks typically 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 terminate the offer if you find it. As with making any offer on real estate, you'll make your offer 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 counter offer. Then it will be your decision whether to accept their counter, or offer a counter to the counter offer. Be aware, you'll be contending with a process that generally involves a group of people at the bank, and they don't work evenings or weekends. It's quite common for there to be days or even weeks of going back and forth. Jim Lewis Realty is accustomed to these situations and will work to ensure there are no undue delays.
Look carefully at the listing and sales prices of similar homes in the neighborhood when considering the purchase of an REO. And factor in any repairs or remodeling 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 and selling foreclosures. However there are also many REOs that are not good buys and not likely to turn a profit.
