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Interested in REO property or a foreclosure?
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Investing in a bank-owned property is not something to be taken lightly. For more information, just contact me through my site or e-mail me. I'm glad to address any questions you have about real estate foreclosures. |
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What's an REO?"REO" is Real Estate Owned. These are homes which have completed the foreclosure process and are now held by the bank or mortgage company. This is different than real estate 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 amassed during the foreclosure process. The buyer must also be ready to pay with cash in hand. And on top of all that, you'll accept the property totally as is. That possibly may comprise of current liens and even current denizens that may require removal.
A bank-owned property, on the contrary, is a much neater and attractive transaction. The REO property was unable to find a buyer during foreclosure auction. The lender now owns it. The bank will take care of the elimination 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. For example, in California, banks are exempt from giving a Transfer Disclosure Statement, a document that normally requires sellers to reveal any defects they are aware of. By hiring Triple Diamond Realty, you can rest assured knowing all parties are fulfilling California state disclosure requirements.
Are REO properties a bargain in Los Angeles or San Bernardino County?
It's frequently thought that any REO must be a bargain and a chance for easy money. This isn't always the case. You have to be prudent about buying a repossession if your intent is make a profit. While it's true that the bank is typically anxious to sell it fast, they are also motivated to minimize any losses.
 When considering what to pay for a foreclosure, carefully analyze 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 and selling foreclosures. However there are also many REOs that are not good buys and not likely to turn a profit.
All set to make an offer?Most banks have a department dedicated to REO that you'll work with when buying REO property from them. To get their properties advertised on the local MLS, the lender will often contract with a listing agent.
Prior to 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 regarding the condition of the property and what their process is for receiving offers. Since banks usually sell REO properties "as is", it's often prudent to include an inspection contingency in your offer that gives you time to check for hidden damage and retract the offer if you find it. As with making any offer on real estate, your offer may be more attractive if you can include documentation of your ability to pay, such as a pre-approval letter from a lender.
Once you've presented your offer, it's customary for the bank to respond with a counter offer. Then it will be your decision whether to accept their counter, or make another counter offer. Your deal could be final in one day, but that's usually not the case. 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. Triple Diamond Realty is are used to working around the schedules of this type of seller and will do everything possible to ensure there are no unnecessary delays.
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