Interested in REO property or a foreclosure in St Augustine?
Savvy consumers will turn to a seasoned pro when considering the purchase of a foreclosed property.
What is an REO?
"REO" is an abbreviation for Real Estate Owned. These are houses which have completed the foreclosure process and are now owned by the bank or mortgage company. This is unlike a property 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 accrued during the foreclosure process. The buyer must also be willing to pay with cash in hand. To top everything off, you'll get the property completely as is. That possibly will comprise of existing liens and even current tenants that need to be thrown out.
A bank-owned property, by contrast, is a more tidy and attractive transaction. The REO property did not find a buyer during foreclosure auction. The lender now owns it. The lender 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 example, in North Carolina, it is optional for foreclosures to have a Property Disclosure Statement,
a document that ordinarily requires sellers to disclose any defects of which they are knowledgeable.
By hiring KELLER WILLIAMS REALTY Atlantic Partners, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Is REO property in St Augustine a bargain?
It is commonly believed that any REO must be a steal and an opportunity for easy money. This frequently isn't true. You have to be prudent about buying a REO if your intent is to make a profit. While it's true that the bank is usually anxious to sell it promptly, they are also motivated to minimize any losses.
Look closely at the listing and sales prices of comparable homes 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 not be money makers.
Prepared to make an offer?
Most lenders 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 use 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 about the condition of the property and what their process is for accepting offers. Since banks almost always 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 cancel 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.
After you've presented your offer, you can expect the bank to make a counter offer. At this point it will be your choice whether to accept their counter, or make another counter offer.
Be aware, you'll be contending with a process that probably involves several people at the bank, and they don't work evenings or weekends. It's quite common for there to be days or even weeks of going back and forth. KELLER WILLIAMS REALTY Atlantic Partners is used to working around the schedules of this type of seller and will do everything possible to ensure there are no unnecessary delays.