Purchasing REO property or a foreclosure in Temecula?
Smart consumers will turn to a seasoned pro when considering a foreclosed property.
What is an REO?
"REO" means Real Estate Owned. These are homes which have been foreclosed upon and are currently possessed by the bank or mortgage company. This differs from 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 accumulated during the foreclosure process. You must also be prepared to pay with cash in hand. Finally, you'll receive the property entirely as is. That possibly may consist of current liens and even current residents that need to be thrown out.
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. The lender now owns it. The bank will attend to 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 normal disclosure requirements.
For example, in North Carolina, it is optional for foreclosures to have a Property Disclosure Statement,
a document that normally requires sellers to make known any defects of which they are knowledgeable.
By hiring California Realty Group, you can rest assured knowing all parties are fulfilling California state disclosure requirements.
Are REO properties a bargain in Temecula?
It's occasionally presumed that any REO must be a bargain and a chance for guaranteed profit. This frequently isn't true. You have to be prudent about buying a REO if your intent is make a profit. Even though the bank is usually eager to sell it soon, they are also motivated to get as much as they can for it.
When pondering 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.
The bargains with money making potential exist, and many people do very well buying and selling foreclosures. But there are also many REOs that are not good buys and may not be money makers.
All set to make an offer?
Most mortgage companies have a department dedicated to REO that you'll work with while buying REO property from them. To get their properties advertised on the local MLS, the lender will typically hire a listing agent.
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 what they know concerning the condition of the property and what their process is for taking 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 unseen damage and withdraw the offer if you find it.
As with making any offer on real estate, providing documentation proving your ability to secure financing may make your offer more attractive, such as a pre-approval letter from a lender.
After you've made your offer, you can expect the bank to counter offer. From there it will be your decision whether to accept their counter, or make another counter offer.
Be aware, you'll be dealing with a process that probably involves a group of people at the bank, and they don't work evenings or weekends. It's quite common for there to be days or even weeks of negotiating back and forth. California Realty Group is accustomed to these situations and will work to ensure there are no unnecessary delays.
California Realty Group 43422 Business Park Dr., Suite 101 Temecula, CA 92590
When pondering 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.
The bargains with money making potential exist, and many people do very well buying and selling foreclosures. But there are also many REOs that are not good buys and may not be money makers.
