Buying REO property or a foreclosure in Baltimore, Harford, and Cecil Counties?
Foreclosed upon and bank owned property purchases require the assistance of an experience professional. For more information, simply contact me through my site or e-mail me. I'm glad to answer any questions you have regarding real estate foreclosures.
What's an REO?
"REO" stands for Real Estate Owned. These are houses which have been foreclosed upon that the bank or mortgage company currently owns. 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. You must also be able to pay with cash in hand. To top everything off, you'll accept the property completely as is. That may comprise of standing liens and even current residents that need to be put out.
A bank-owned property, by contrast, is a much cleaner and attractive option. The REO property was unable to find a buyer during foreclosure auction. The bank now owns it. The lender will handle the removal of tax liens, evict occupants if needed and generally arrange for the issuance of a title insurance policy to the buyer at closing.
You should be aware that REOs may be exempt from standard disclosure requirements. In California, for example, banks are exempt from giving a Transfer Disclosure Statement, a document that ordinarily requires sellers to disclose any defects they are knowledgeable of. By hiring Remax Elite Realty, you can rest assured knowing all parties are fulfilling Maryland state disclosure requirements.
Are REO properties a bargain in Baltimore County?
It is sometimes thought that any foreclosure must be a bargain and a possibility for easy money. This isn't always the case. You have to be cautious about buying a repossession if your intent is make money. Even though the bank is usually eager to offload it fast, they are also motivated to minimize any losses.
When contemplating what to pay for 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. It is possible to find REOs with money-making potential, and many people do very well flipping foreclosures. Still there are also many REOs that are not good buys and may lose money.
Time to make an offer?
Most banks 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 frequently use a listing agent.
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 their knowledge about the condition of the property and what their process is for receiving offers. Since banks most commonly sell REO properties "as is", you may want 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. If, as a buyer, you can provide documentation showing 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 goes for any type of real estate offer.)
After you've submitted your offer, it's customary for the bank to respond with a counter offer. At this point it will be up to you to decide whether to accept their counter, or make another counter offer. Your deal might be settled in one day, but that's usually not the case. Since offers and counter offers usually allow a day or more for the other party to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer. Remax Elite Realty is are used to working around the schedules of this type of seller and will do everything possible to ensure there are no undue delays.
Thank you for all of your continued support. Please keep me in mind when it comes to the real estate needs of your friends and family, I'm here to help!
When contemplating what to pay for 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. It is possible to find REOs with money-making potential, and many people do very well flipping foreclosures. Still there are also many REOs that are not good buys and may lose money.
