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Purchasing REO property or a foreclosure in ROYAL PALM BEACH?
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Foreclosed upon and bank owned property purchases require the assistance of an experience professional.
If you have questions regarding real estate in ROYAL PALM BEACH, Florida, call me or send me an e-mail.
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What is an REO?
"REO" stands for Real Estate Owned. These are properties which have been foreclosed upon that the bank or mortgage company now possesses. This differs from 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 accrued during the foreclosure process. You must also be willing to pay with cash in hand. To top everything off, you'll accept the property totally as is. That could include existing liens and even current denizens that may require removal.
A bank-owned property, by contrast, is a much cleaner and attractive option. The REO property did not find a buyer during foreclosure auction. Now the bank owns it. The bank will deal with 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.
Take notice that REOs may be exempt from typical disclosure requirements.
For example, in Nevada, it is optional for foreclosures to have a Property Disclosure Statement,
a document that typically requires sellers to tell you about any defects of which they are aware.
By hiring ON CALL REALTY INC., you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Is REO property in ROYAL PALM BEACH a bargain?
It's occasionally presumed that any foreclosure must be a steal and a chance for guaranteed profit. This often isn't 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 anxious to sell it fast, they are also looking to minimize any losses.
When considering the value of 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.
The bargains with money making potential exist, and many people do very well flipping foreclosures. Still 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 when buying REO property from them. To get their properties advertised on the local MLS, the lender will usually use a listing agent.
Prior to 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 their knowledge about 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 retract the offer if you find it.
As with making any offer on real estate, providing documentation showing your ability to secure financing may make your offer more attractive, such as a pre-approval letter from a lender.
After you've submitted your offer, it's customary for the bank to make a counter offer. Then it will be your decision whether to accept their counter, or offer a counter to the counter offer.
Your deal might be final in one day, but that's rare. Since offers and counter offers usually allow a day or more for the other party to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer.
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