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Interested in REO property or a foreclosure in Amherst?
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Just as with any home purchase, your smartest move is to hire a professional real estate agent.
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What's an REO?
"REO" or Real Estate Owned are properties which have gone through foreclosure and are currently held by the bank or mortgage company. This is not the same as a property 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 accrued during the foreclosure process. The buyer must also be able to pay with cash in hand. Finally, you'll receive the property 100% as is. That may include prevailing liens and even current residents that need to be expelled.
A bank-owned property, on the contrary, is a more tidy and attractive transaction. The REO property was unable to 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.
Note that REOs may be exempt from normal disclosure requirements.
In California, for example, banks are not required to give a Transfer Disclosure Statement,
a document that ordinarily requires sellers to tell you about any defects of which they are informed.
By hiring FIVE OAKS REALTY, you can rest assured knowing all parties are fulfilling Ohio state disclosure requirements.
Is REO property in Amherst a bargain?
It's occasionally believed that any foreclosure must be a good deal and an opportunity for easy money. This isn't necessarily true. You have to be prudent about buying a repossession if your intent is make money. Even though the bank is typically anxious to offload it soon, they are also motivated to get as much as they can for it.
When pondering the value of REO property, you need to look closely at comparable sales in the neighborhood and be sure to take into account the time and cost of any repairs or remodeling needed to prepare the house for resale.
It is possible to find REOs with money-making potential, and many people do very well buying foreclosures. But there are also many REOs that are not good buys and may not be money makers.
Time to make an offer?
Most lenders have staff 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 frequently hire a listing agent.
Before making your offer, you'll want to contact either the listing agent or REO department at the bank 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 most commonly 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 retract the offer if you find it.
If, as a buyer, you can provide documentation proving your ability to secure financing, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This is generally true for any real estate offer.)
After you've submitted your offer, it's customary for the bank to respond with a counter offer. From there it will be your decision whether to accept their counter, or submit another counter offer.
Your deal might be final in a single day, but that's rare. Since offers and counter offers usually give the other party a day or longer to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer. FIVE OAKS REALTY is accustomed to these situations and will work to ensure there are no unnecessary delays.
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