Making an offer on REO property or a foreclosure in Merritt Island?
Foreclosed upon and bank owned property purchases require the assistance of an experience professional.
If you have questions about real estate in Merritt Island, Florida, call me or send me an e-mail.
What's an REO?
"REO" or Real Estate Owned are houses which have completed the foreclosure process that the bank or mortgage company presently owns. This is different than 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 accumulated during the foreclosure process. The buyer must also be prepared to pay with cash in hand. To top everything off, you'll accept the property completely as is. That possibly may involve current liens and even current residents that may require removal.
A bank-owned property, on the other hand, is a much neater and attractive proposition. The REO property didn't find a buyer during foreclosure auction. The bank now owns it. The lender will deal with the elimination 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 standard disclosure requirements.
In California, for example, banks do not have to give a Transfer Disclosure Statement,
a document that typically requires sellers to tell you about any defects of which they are knowledgeable.
By hiring Real Estate Brevard, LLC, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Is REO property in Merritt Island a bargain?
It is occasionally thought that any REO must be a bargain and an opportunity for guaranteed profit. This often isn't true. You have to be prudent about buying a REO if your intent is make a profit. While it's true that the bank is usually anxious to sell it fast, they are also motivated to get as much as they can for it.
When considering 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.
There are bargains with potential to make money, and many people do very well buying foreclosures. Still there are also many REOs that are not good buys and not likely to turn a profit.
Prepared to make an offer?
Most banks 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.
Before 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 concerning the condition of the property and what their process is for receiving offers. Since banks typically sell REO properties "as is", it may be in your best interest 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.
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 presented your offer, you can expect the bank to respond with a counter offer. At this point it will be your decision whether to accept their counter, or make another counter offer.
Be aware, you'll be working with a process that generally involves a group of 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 going back and forth. Real Estate Brevard, LLC 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.
Zack Spurlock Broker Assoc.
Real Estate Brevard, LLC 380 N. Courtenay Pkwy. Merritt Island, FL 32953
When considering 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.
There are bargains with potential to make money, and many people do very well buying foreclosures. Still there are also many REOs that are not good buys and not likely to turn a profit.
