Buying REO property or a foreclosure?


	Just as with any property purchase, your smartest move is to hire a professional real estate agent. For more information, you can contact me through my site or e-mail me. I'm glad to address questions you have regarding real estate foreclosures.

What's an REO?

"REO" or Real Estate Owned are houses which have completed the foreclosure process and are now possessed by the bank or mortgage company. This is different than real estate up for foreclosure auction. Re/Max Masters Realty has experience to share with foreclosures and bank owned properties in Chino Hills, California

Re/Max Masters Realty has experience to share with foreclosures and bank owned properties in Chino Hills, California

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. You must also be able to pay with cash in hand. And on top of all that, you'll get the property totally as is. That might involve current liens and even current denizens that need to be removed.

A bank-owned property, on the other hand, is a much neater and attractive option. The REO property didn't find a buyer during foreclosure auction. Now the bank owns it. The lender will take care of the removal of tax liens, evict occupants if needed and generally plan for the issuance of a title insurance policy to the buyer at closing.

Take notice that REOs may be exempt from normal disclosure requirements. In California, for example, banks do not have to give a Transfer Disclosure Statement, a document that ordinarily requires sellers to tell you about any defects they are informed of. By hiring Re/Max Masters Realty, you can rest assured knowing all parties are fulfilling California state disclosure requirements.

Am I guaranteed a good deal when investing in a bank owned property?

It is occasionally believed that any foreclosure must be a bargain and a possibility for guaranteed profit. This simply isn't true. You have to be very careful about buying a REO if your intent is profit from the sale. Even though the bank is usually eager to offload it fast, they are also motivated to get as much as they can for it.

Re/Max Masters Realty has experience to share with foreclosures and bank owned properties in Chino Hills, California

Look carefully 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 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 and selling foreclosures. However there are also many REOs that are not good buys and may not be money makers.

Ready to make an offer?

Most mortgage companies have staff 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 usually use a listing agent.

Before making your offer, you'll want to contact either the listing agent or REO department at the bank and learn as much as you can about what they know about the condition of the property and what their process is for getting offers. Since banks almost always 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 terminate 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 real estate offer.)

Once you've submitted your offer, you can expect the bank to respond with a counter offer. Then it will be your choice whether to accept their counter, or submit another counter offer. Understand, you'll be working with a process that generally 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. Re/Max Masters Realty is accustomed to these situations and will work to ensure there are no undue delays.