Buying REO property or a foreclosure in San Diego? Bank or Asset Manager looking for an REO Agent? Here's what one of our Asset Manager's wrote in a recent e-mail..........................
" Greg, Thank you so much for the detailed explanation. It was a stellar example of a conscientious agent who did more than requested by going above and beyond, and by doing so, saved the seller a lot of money. So we thank you Greg, for the terrific job! Look forward to the next one!" January 2012
Irene --- Asset Manager Platinum Marketing Services
|Savvy consumers will turn to a seasoned pro when considering the purchase of a foreclosed property, or Banks when listing their foreclosed property with an experienced and knowledgeable Agent.|
What is an REO?"REO" is short for Real Estate Owned. These are homes which have completed the foreclosure process and are currently possessed by the bank or mortgage company. This differs from 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. And on top of all that, you'll accept the property 100% as is. That possibly may consist of standing liens and even current residents that need to be evicted.
A bank-owned property, on the other hand, is a more tidy and attractive option. The REO property did not find a buyer during foreclosure auction. Now the lender owns it. The lender will see to the removal of tax liens, evict occupants if needed and generally prepare 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 exempt from giving a Transfer Disclosure Statement, a document that typically requires sellers to tell you about any defects of which they are knowledgeable. By hiring Pacific One Realty, you can rest assured knowing all parties are fulfilling California state disclosure requirements.
Are REO properties a bargain in San Diego County?It is occasionally assumed that any foreclosure must be a good deal and a chance for guaranteed profit. This frequently isn't true. You have to be very careful about buying a repossession if your intent is make money. While it's true that the bank is typically anxious to offload it promptly, they are also looking to get as much as they can for it.
When considering 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. 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.
Ready to make an offer?Most lenders have a department 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.
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 about the condition of the property and what their process is for receiving offers. Since banks typically sell REO properties "as is", you may want to include an inspection contingency in your offer that gives you time to check for unseen damage and terminate the offer if you find it. As with making any offer on real estate, you'll make your offer more attractive if you can include documentation of your ability to pay, such as a pre-approval letter from a lender.
Once you've submitted your offer, it's customary for the bank to make a counter offer. At this point it will be your decision whether to accept their counter, or submit another counter offer. Understand, you'll be contending with a process that usually 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.