Looking for REO property or a foreclosure in Central Florida?
Just as with any home purchase, your smartest move is to hire a professional real estate agent. If you have questions regarding real estate in Heathrow, Florida, call me or send me an e-mail.
What is an REO?
"REO" or Real Estate Owned are homes which have completed the foreclosure process and are presently held by the bank or mortgage company. This is unlike real estate up for foreclosure auction.
When buying 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 will include prevailing liens and even current residents that need to be kicked out.
A bank-owned property, on the other hand, is a more tidy and attractive proposition. The REO property was unable to find a buyer during foreclosure auction. Now the bank owns it. The bank will see to the elimination of tax liens, evict occupants if needed and generally organize 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, in California, banks do not have to give a Transfer Disclosure Statement, a document that usually requires sellers to tell you about any defects of which they are aware. By hiring Stirling Sotheby's International Realty, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Am I guaranteed a low price when purchasing a bank owned property in Heathrow?
It is frequently thought that any foreclosure must be a bargain and an opportunity for guaranteed profit. This often isn't true. You have to be very careful about buying a REO if your intent is make a profit. While it's true that the bank is typically anxious to offload it quickly, they are also motivated to minimize any losses.
Look closely at the listing and sales prices of comparable properties 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. 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 may lose money.
Ready to make an offer?
Most mortgage companies have a department dedicated to REO that you'll work with in buying REO property from them. To get their properties advertised on the local MLS, the lender will typically hire 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 about the condition of the property and what their process is for receiving offers. Since banks typically sell REO properties "as is", you'll want to be sure and 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 demonstrating your ability to pay, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This goes for any type of real estate offer.)
Once you've presented your offer, it's customary for the bank to respond with a counter offer. From there it will be your choice whether to accept their counter, or submit another counter offer. Your deal could be final in a single day, 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.
Look closely at the listing and sales prices of comparable properties 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. 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 may lose money.
