Buying REO property or a foreclosure in Bellevue?
Foreclosed upon and bank owned property purchases require the assistance of an experience professional. If you have any questions regarding real estate in Bellevue, Washington, call me or send me an e-mail.
What’s an REO?
“REO” or Real Estate Owned are homes which have gone through foreclosure and are now owned by the bank or mortgage company. This is not the same as 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. The buyer must also be able to pay with cash in hand. And on top of all that, you’ll accept the property 100% as is. That might consist of prevailing liens and even current denizens that need to be removed.
A bank-owned property, conversely, is a much neater and attractive deal. The REO property did not find a buyer during foreclosure auction. Now the bank owns it. The lender will see to the elimination of tax liens, evict occupants if needed and generally plan for the issuance of a title insurance policy to the buyer at closing. Do be aware that REOs may be exempt from normal disclosure requirements. For example, in Texas, it is optional for foreclosures to have a Property Disclosure Statement, a document that typically requires sellers to reveal any defects they are informed of. By hiring Aaron J. Rosen, you can rest assured knowing all parties are fulfilling Washington state disclosure requirements.
Are REO properties a bargain in Bellevue?
It’s frequently thought that any REO must be a steal and an opportunity for easy money. This isn’t necessarily true. You have to be very careful about buying a REO if your intent is make money. Even though the bank is typically eager to sell it promptly, they are also motivated to get as much as they can for it. Look closely at the listing and sales prices of comparable homes in the neighborhood when making an offer on an REO. And factor in any repairs or remodeling necessary to prepare the house for resale or moving in. It is possible to find REOswith money-making potential, and many people do very well flipping foreclosures. However there are also many REOs that are not good buys and may not be money makers.
All set to make an offer?
Most banks have a department dedicated to REO that you’ll work with in 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 what they know concerning the condition of the property and what their process is for getting offers. Since banks typically 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 terminate 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.)
Once you’ve submitted your offer, you can expect the bank to make a counter offer. At this point it will be your choice whether to accept their counter, or submit another counter offer. Realize, you’ll be dealing with a process that generally involves several people at the bank, and they don’t work evenings or weekends. It’s typical for the process of offers and counter offers to take days or even weeks. Aaron J. Rosen is accustomed to these situations and will work to ensure there are no undue delays.
Give me a call today to discuss foreclosures in your area. (253) 312-5952