Making an offer on REO property or a foreclosure in San Diego?

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

What is an REO?

"REO" is an abbreviation for Real Estate Owned. These are homes which have been foreclosed upon that the bank or mortgage company now owns. This is different than a property up for foreclosure auction. Michael Barrow Realty | An affilitate of Keller Williams Realty has experience to share with foreclosures and bank owned properties in San Diego, California

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 ready to pay with cash in hand. And on top of all that, you'll receive the property totally as is. That may involve standing liens and even current residents that need to be put out.

A bank-owned property, by contrast, is a much neater and attractive option. The REO property was unable to find a buyer during foreclosure auction. Now the bank owns it. The lender will attend to the elimination of tax liens, evict occupants if needed and generally arrange 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 North Carolina, it is optional for foreclosures to have a Property Disclosure Statement, a document that ordinarily requires sellers to make known any defects of which they are aware. By hiring Michael Barrow Realty | An affilitate of Keller Williams Realty, you can rest assured knowing all parties are fulfilling California state disclosure requirements.

Am I guaranteed a bargain when investing in an REO property in San Diego?

It is commonly believed that any REO must be a steal and a chance for easy money. This isn't always the case. You have to be prudent about buying a REO if your intent is to profit from the sale. Even though the bank is often eager to offload it quickly, they are also looking to minimize any losses.

Michael Barrow Realty | An affilitate of Keller Williams Realty has experience to share with foreclosures and bank owned properties in San Diego, California When pondering what to pay for a foreclosure, 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. The bargains with money making potential exist, 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.

All set to make an offer?

Most lenders have staff dedicated to REO that you'll work with when buying REO property from them. Usually the REO department will use a listing agent to get their REO properties listed on the local MLS.

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 what they know regarding the condition of the property and what their process is for receiving 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 unknown damage and cancel the offer if you find it. If, as a buyer, you can provide documentation demonstrating 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 holds for any real estate offer.)

Once you've presented your offer, you can expect the bank to respond with a counter offer. From there it will be your choice whether to accept their counter, or make another counter offer. Realize, you'll be contending with a process that generally involves several people at the bank, and they don't work evenings or weekends. It's typical for the process of offers and counter offers to take days or even weeks. Michael Barrow Realty | An affilitate of Keller Williams Realty is accustomed to these situations and will work to ensure there are no undue delays.

Want To Buy A Foreclosure?

Are you interested in buying a foreclosure property, or do you want more information about foreclosures? Please fill out the form below and we will contact you with more info.

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