Purchasing REO property or a foreclosure in Rancho Cucamonga?
Savvy consumers will turn to a seasoned pro when considering a foreclosed property.
For more information, simply contact me
through my site or e-mail me
. I'm happy to address questions you have about real estate foreclosures.
What is an REO?
"REO" stands for Real Estate Owned. These are homes which have completed the foreclosure process and are currently owned by the bank or mortgage company. 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 willing to pay with cash in hand. To top everything off, you'll receive the property entirely as is. That possibly may involve existing liens and even current tenants that need to be kicked out.
A bank-owned property, conversely, is a much cleaner and attractive deal. The REO property did not find a buyer during foreclosure auction. The lender now owns it. The lender will take care of 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.
Take notice that REOs may be exempt from typical disclosure requirements.
For example, in Texas, it is optional for foreclosures to have a Property Disclosure Statement,
a document that typically requires sellers to make known any defects of which they are aware.
By hiring Raquel Perez, you can rest assured knowing all parties are fulfilling California state disclosure requirements.
Am I guaranteed a good deal when buying an REO property in Rancho Cucamonga?
It is frequently believed that any foreclosure must be a good deal and an opportunity for easy money. This simply isn't true. You have to be cautious about buying a REO if your intent is to make money off of it. Even though the bank is typically eager to sell it promptly, they are also looking to get as much as they can for it.
When pondering what to pay for a foreclosure, 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 and selling 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 mortgage companies have a department dedicated to REO that you'll work with when buying REO property from them. Commonly the REO department will use a listing agent to get their REO properties listed on the local MLS.
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 what they know regarding the condition of the property and what their process is for getting 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 unseen damage and terminate the offer if you find it.
As with making any offer on real estate, providing documentation showing your ability to secure financing may make your offer more attractive, such as a pre-approval letter from a lender.
Once you've made your offer, it's customary for the bank to make a counter offer. From there it will be up to you to decide whether to accept their counter, or offer a counter to the counter offer.
Be aware, you'll be working with a process that generally involves several people at the bank, and they don't work evenings or weekends. It's not uncommon for there to be days or even weeks of negotiating back and forth.