Looking for REO property or a foreclosure in Sarasota?
Smart consumers will turn to a seasoned pro when considering a foreclosed property.
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What is an REO?
"REO" means Real Estate Owned. These are properties which have completed the foreclosure process that the bank or mortgage company presently holds. This differs from 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 added during the foreclosure process. You must also be prepared to pay with cash in hand. And on top of all that, you'll get the property totally as is. That could consist of current liens and even current occupants that may require eviction.
A bank-owned property, on the contrary, is a much cleaner and attractive transaction. The REO property did not find a buyer during foreclosure auction. The bank now owns it. The bank 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 are not required to give a Transfer Disclosure Statement,
a document that typically requires sellers to disclose any defects of which they are knowledgeable.
By hiring RE/MAX Platinum Realty, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Am I assured a low price when investing in an REO property in Sarasota?
It's sometimes assumed that any foreclosure must be a bargain and an opportunity for easy money. This simply isn't true. You have to be very careful about buying a REO if your intent is to profit from the sale. While it's true that the bank is usually anxious to sell it promptly, they are also motivated to minimize any losses.
Look carefully at the listing and sales prices of comparable properties in the neighborhood when making an offer on an REO. And factor in any repairs or remodeling necessary to prepare the house for resale or moving in.
It is possible to find REOs with money-making potential, and many people do very well buying and selling foreclosures. Still, there are also many REOs that are not good buys and not likely to turn a profit.
Ready to make an offer?
Most mortgage companies have a department dedicated to REO that you'll work with when buying REO property from them. Normally the REO department will use a listing agent to get their REO properties listed on the local MLS.
Prior to 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 regarding the condition of the property and what their process is for receiving offers. Since banks usually 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 hidden damage and cancel the offer if you find it.
If, as a buyer, you can provide documentation showing your ability to pay, 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 type of real estate offer.)
After you've presented your offer, you can expect the bank to make a counter offer. Then it will be your choice whether to accept their counter, or submit another counter offer.
Your deal might be final in one 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.