Looking for REO property or a foreclosure in Raleigh?
Just as with any home purchase, your wisest move is to hire a professional real estate agent.
For more information, you can contact me
through my site or e-mail me
. I'm happy to answer questions you have regarding real estate foreclosures.
What's an REO?
"REO" means Real Estate Owned. These are houses which have gone through foreclosure that the bank or mortgage company now holds. 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. You must also be ready to pay with cash in hand. And on top of all that, you'll accept the property totally as is. That might consist of current liens and even current denizens that need to be put out.
A bank-owned property, on the contrary, is a much neater and attractive deal. The REO property didn't find a buyer during foreclosure auction. Now the bank owns it. The bank will see to the elimination of tax liens, evict occupants if needed and generally arrange for the issuance of a title insurance policy to the buyer at closing.
Note that REOs may be exempt from typical disclosure requirements.
For example, in California, banks do not have to give a Transfer Disclosure Statement,
a document that ordinarily requires sellers to disclose any defects they are aware of.
By hiring David Johnson, you can rest assured knowing all parties are fulfilling North Carolina state disclosure requirements.
Is REO property in Raleigh a bargain?
It's occasionally believed that any foreclosure must be a bargain and a chance for easy money. This isn't necessarily the case. You have to be very careful about buying a repossession if your intent is to make a profit. While it's true that the bank is often eager to offload it soon, they are also motivated to get as much as they can for it.
When contemplating the value of a foreclosure, carefully analyze 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 buying foreclosures. However, there are also many REOs that are not good buys and not likely to turn a profit.
All set to make an offer?
Most mortgage companies have staff dedicated to REO that you'll work with while buying REO property from them. Commonly 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 find out 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", it's often prudent to include an inspection contingency in your offer that gives you time to check for unseen 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.
Once you've submitted your offer, you can expect the bank to counter offer. From there it will be your choice whether to accept their counter, or offer a counter to the counter offer.
Your transaction 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.