Looking For A Bargain?
Considering buying a Foreclosure or a Bank Owned (REO) property?
(There is a BIG difference between them.)
You’ve heard a lot of buzz about the deals to be had out there and you’re ready to get in on the action and make a bundle. Sounds great and it might just happen, but first you should take a look at some facts and get prepared.
Foreclosure Sales
The Foreclosure Auction usually takes place at the property to be auctioned. There is a limited time to view the property prior to the auction and if the owner has not vacated, it may not be possible to gain entrance prior to the foreclosure. Foreclosure sales begin with a minimum bid that includes the loan balance, any accrued interest, plus attorney's fees and any costs association with the foreclosure process. In order to bid at a foreclosure auction, you must have a cashier's check in your hand for the minimum required downpayment (usually $5,000-$10,000) and you must pay the balance within 30 days. If you are the successful bidder, you receive the property in "as is" condition, which may include someone still living in the property. You will be responsible for the eviction if they are still there after the closing. There may also be other liens against the property.
Be advised that if a high enough bid is not offered by the public, then the property "reverts" to the bank. Since what is owed to the bank may be more than what the property is actually worth, not all foreclosure auctions result in a successful sale. It becomes an REO, or "real estate owned" property.
There are steps that you can take to avoid many of the pitfalls involved in the purchase of Foreclosure properties. The most important being to have a title search done prior to the auction. Contact Dea for more details and a referral to an experienced local law office that will guide you through the pre-auction process.
REO Properties For Sale
An REO (Real Estate Owned) is a property that goes back to the bank/mortgage company after an unsuccessful foreclosure auction. The bank now owns the property and the mortgage loan no longer exists. The bank will handle the eviction, if necessary, and may do some repairs. They will negotiate with the IRS for removal of tax liens and pay off any homeowner’s association dues. The bank will eventually list the property for sale with a Real Estate Agent after one or more "Broker Price Opinions" (BPOs) have been completed. The BPO reports help the bank to decide what the listing price of the property will be.
How Banks Sell REO's
Each bank/lender works a little differently, but they all have similar goals. They want to get the best price possible. Generally, banks have an entire department set up to manage their REO inventory and work with the Listing Agent to get the property sold. It is very important for one who is trying to purchase a bank-owned property to be working with an Agent that is skillful in negotiating and working in the Buyer’s best interest. That is, an Agent working to obtain the best price and terms of sale for the Buyer.
A Bank Owned Property Might Not Be A Great Bargain.
Do your homework with your Buyer’s Agent before making an offer. Make sure that the price you are willing to pay is comparable to other homes in the neighborhood. Make sure the offer is subject to satisfactory inspections. Consider the condition of the property and costs of renovations, including time to complete them.
Working With Dea Riendeau, Accredited Buyer Representative
I keep current on the properties in the MLS that are Bank Owned. Those facts are not always general knowledge and provided by Agents. My clients may have free access to my database of Bank Owned properties as well as automatic email updates on any new Bank Owned properties that hit the market.
There are no fees charged for access to my database of Bank Owned Properties. This is a unique service that I offer to my Clients only.
The Focus Of My Business Is Buyer Representation.
I work diligently to keep my Buyers well informed and I take great pride in helping my Clients purchase properties with the best possible price, terms and conditions.
If you are interested in the valuable services that I provide and would like to work with me as your Exclusive Buyer’s Agent. Please fill out the form to the left.
I look forward to working with you.
Dea Riendeau ABR, GRI, CRS
REALTOR
Accredited Buyer Representative
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