Interested in REO property or a foreclosure in Delray Beach?
Foreclosed upon and bank owned property purchases require the assistance of an experience professional.
Should you have any questions about real estate in Delray Beach, Florida, call me or send me an e-mail.
What's an REO?
"REO" or Real Estate Owned are homes which have completed the foreclosure process that the bank or mortgage company currently owns. This is unlike 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. To top everything off, you'll get the property entirely as is. That could include prevailing liens and even current residents that need to be kicked out.
A bank-owned property, on the other hand, is a much cleaner and attractive proposition. The REO property didn't find a buyer during foreclosure auction. The bank now owns it. The bank will see to the elimination 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 instance, in California, banks are exempt from giving a Transfer Disclosure Statement,
a document that typically requires sellers to disclose any defects of which they are informed.
By hiring Illustrated Properties Real Estate, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Am I assured a bargain when investing in an REO property in Delray Beach?
It is frequently believed that any REO must be a good buy and a chance for easy money. This isn't necessarily true. You have to be cautious about buying a REO if your intent is to make money off of it. While it's true that the bank is typically eager to sell it quickly, they are also motivated to get as much as they can for it.
Look closely at the listing and sales prices of competing properties in the neighborhood when making an offer on an REO. And factor in any repairs or upgrades 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 and selling foreclosures. However there are also many REOs that are not good buys and may not be money makers.
Time 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 frequently hire a listing agent.
Before making your offer, you'll want to contact either the listing agent or REO department at the bank and discover as much as you can about what they know about the condition of the property and what their process is for getting offers. Since banks most commonly 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 unknown damage and terminate 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.
After you've submitted your offer, you can expect the bank to counter offer. Then it will be up to you to decide whether to accept their counter, or submit another counter offer.
Understand, you'll be contending with a process that generally involves a group of people at the bank, and they don't work evenings or weekends. It's quite common for the process of offers and counter offers to take days or even weeks. Illustrated Properties Real Estate is accustomed to these situations and will work to ensure there are no unnecessary delays.
* MOL = More or Less
Illustrated Properties Real Estate 610 E. Atlantic Ave. Delray Beach, FL 33483
Look closely at the listing and sales prices of competing properties in the neighborhood when making an offer on an REO. And factor in any repairs or upgrades 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 and selling foreclosures. However there are also many REOs that are not good buys and may not be money makers.
