Buying REO property or a foreclosure in West Memphis?
|Foreclosed upon and bank owned property purchases require the assistance of an experience professional.|
What's an REO?"REO" or Real Estate Owned are properties which have been foreclosed upon that the bank or mortgage company now possesses. This is different than real estate 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 added during the foreclosure process. The buyer must also be ready to pay with cash in hand. To top everything off, you'll accept the property entirely as is. That might consist of prevailing liens and even current denizens that need to be evicted.
A bank-owned property, on the other hand, is a much neater and attractive proposition. The REO property did not find a buyer during foreclosure auction. Now the bank owns it. The bank will deal with the removal of tax liens, evict occupants if needed and generally organize 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 instance, in California, banks are not required to give a Transfer Disclosure Statement, a document that ordinarily requires sellers to make known any defects they are aware of. By hiring Carter Realty Company, you can rest assured knowing all parties are fulfilling Arkansas state disclosure requirements.
Am I assured a bargain when investing in a bank owned property in West Memphis?It is sometimes assumed that any foreclosure must be a good buy and an opportunity for easy money. This frequently isn't true. You have to be prudent about buying a REO if your intent is to make money off of it. While it's true that the bank is often anxious to offload it promptly, they are also motivated to minimize any losses.
Look closely at the listing and sales prices of comparable homes in the neighborhood when considering the purchase of an REO. And factor in any repairs or remodeling necessary to prepare the house for resale or moving in. There are bargains with potential to make money, and many people do very well buying foreclosures. However 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. Typically 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 their knowledge about the condition of the property and what their process is for accepting 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 terminate the offer if you find it. As with making any offer on real estate, providing documentation of your ability to pay may make your offer more attractive, such as a pre-approval letter from a lender.
After you've presented your offer, you can expect the bank to make a counter offer. At this point it will be your decision whether to accept their counter, or make another counter offer. Your transaction could be settled in one day, but that's rare. 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. Carter Realty Company is accustomed to these situations and will work to ensure there are no unnecessary delays.