Buying REO property or a foreclosure in Kalamazoo?
|Foreclosed upon and bank owned property purchases require the assistance of an experience professional. For more information, simply contact me through my site or e-mail me. I'm glad to address any questions you have regarding real estate foreclosures.|
What is an REO?"REO" or Real Estate Owned are houses which have gone through foreclosure that the bank or mortgage company now possesses. This is unlike a property 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 added during the foreclosure process. The buyer must also be ready to pay with cash in hand. Finally, you'll accept the property completely as is. That possibly may consist of standing liens and even current residents that need to be evicted.
A bank-owned property, conversely, is a much cleaner and attractive proposition. The REO property didn't find a buyer during foreclosure auction. Now the lender owns it. The bank will handle 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 typical disclosure requirements. For instance, banks do not have to give a Seller/Transfer Disclosure Statement, a document that typically requires sellers to disclose any defects of which they are aware. By hiring Park Place Real Estate, you can submit offers and receive representation throughout the transaction. We will work with you to help you to understand the potential issues and the benefits in purchasing all types of property.
Am I guaranteed a low price when investing in an REO property in Kalamazoo?It's frequently thought that any REO must be a good deal and a chance for easy money. This isn't always true. You have to be very careful about buying a REO if your intent is to make money. Even though the bank is usually eager to offload it promptly, they are also motivated to get as much as they can for it.
Look carefully at the listing and sales prices of comparable homes in the neighborhood when considering the purchase of an REO. 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 flipping foreclosures. But, there are also many REOs that are not good buys and may not turn a profit.
All set to make an offer?Prior to making your offer, you will want to inspect the property and consult with your Park Place Real Estate agent to learn as much as you can about the local market values, the previous sales history of the property and what bank represents as their process in responding to offers. Since banks most commonly 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 hidden damage and withdraw the offer if you find it. As a buyer, you are expected to provide documentation demonstrating your ability to pay, such as a pre-approval letter from a lender, your offer will be more attractive. (This holds true for any type of real estate offer.)
Once you've presented your offer, it is possible that the bank will make a counter offer. Then it will be your decision whether to accept their counter, or make another counter offer. Your deal might be settled in a day or two, but that's usually not the case. Since offers and counter offers usually allow a day or more for the other party to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer.