Making an offer on REO property or a foreclosure in Pinellas County?
Smart consumers will turn to a seasoned pro when considering a foreclosed property.
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What is an REO?
"REO" or Real Estate Owned are properties which have completed the foreclosure process that the bank or mortgage company now holds. This differs from 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 amassed during the foreclosure process. The buyer must also be ready to pay with cash in hand. Finally, you'll receive the property totally as is. That possibly could include prevailing liens and even current denizens that need to be kicked out.
A bank-owned property, on the other hand, is a more tidy and attractive deal. The REO property was unable to find a buyer during foreclosure auction. Now the bank owns it. The lender will attend to 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.
Take notice that REOs may be exempt from standard disclosure requirements.
For example, in Texas, it is optional for foreclosures to have a Property Disclosure Statement,
a document that ordinarily requires sellers to reveal any defects of which they are informed.
By hiring Park Property Group, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Am I assured a bargain when buying a bank owned property in Pinellas County?
It is occasionally believed that any REO must be a good buy and an opportunity for guaranteed profit. This isn't necessarily the case. You have to be cautious about buying a REO if your intent is to make money. While it's true that the bank is usually eager to sell it fast, they are also looking 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 upgrades necessary to prepare the house for resale or moving in.
There are bargains with potential to make money, 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.
Ready to make an offer?
Most lenders have staff dedicated to REO that you'll work with in buying REO property from them. Usually the REO department will use a listing agent to get their REO properties listed on the local MLS.
Prior to 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 what they know regarding the condition of the property and what their process is for taking offers. Since banks typically sell REO properties "as is", you may want to include an inspection contingency in your offer that gives you time to check for unseen damage and cancel the offer if you find it.
If, as a buyer, you can provide documentation proving your ability to pay, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This holds for any type of real estate offer.)
After you've made your offer, it's customary for the bank to counter offer. Then it will be your choice whether to accept their counter, or make another counter offer.
Realize, 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 not uncommon for there to be days or even weeks of negotiating back and forth. Park Property Group is used to working around the schedules of this type of seller and will do everything possible to ensure there are no unnecessary delays.