|
|
|
|
|
|
|
|
Making an offer on REO property or a foreclosure in San Jose?
 |
 |
 |
Foreclosed upon and bank owned property purchases require the assistance of an experience professional.
For more information, you can contact me through my site or e-mail me. I'm happy to answer any questions you have about real estate foreclosures.
|
|
|
|
 |
What's an REO?
"REO" or Real Estate Owned are houses which have been through foreclosure that the bank or mortgage company currently owns. 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 added during the foreclosure process. The buyer must also be willing to pay with cash in hand. And on top of all that, you'll receive the property totally as is. That possibly will comprise of existing liens and even current residents that need to be removed.
A bank-owned property, by contrast, is a more tidy and attractive deal. The REO property didn't find a buyer during foreclosure auction. The bank now owns it. The bank will deal with the removal of tax liens, evict occupants if needed and generally arrange 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 Texas, it is optional for foreclosures to have a Property Disclosure Statement,
a document that usually requires sellers to reveal any defects they are knowledgeable of.
By hiring Joe Wilson, Intero Real Estate Services, you can rest assured knowing all parties are fulfilling California state disclosure requirements.
Am I guaranteed a good deal when investing in a bank owned property in San Jose?
It's commonly assumed that any REO must be a steal and a chance for guaranteed profit. This isn't always true. You have to be very careful about buying a REO if your intent is to make money off of it. While it's true that the bank is usually eager to sell it soon, they are also looking to minimize any losses.
When considering the value of a foreclosure, 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.
It is possible to find REOs with money-making potential, and many people do very well buying and selling foreclosures. However there are also many REOs that are not good buys and not likely to turn a profit.
Time to make an offer?
Most banks have staff dedicated to REO that you'll work with when buying REO property from them. Commonly 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 learn as much as you can about their knowledge concerning the condition of the property and what their process is for accepting offers. Since banks usually 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 unseen damage and terminate the offer if you find it.
If, as a buyer, you can provide documentation proving 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 is generally true for any type of real estate offer.)
After you've made your offer, you can expect the bank to counter offer. At this point it will be up to you to decide whether to accept their counter, or make another counter offer.
Be aware, you'll be dealing with a process that usually involves a group of people at the bank, and they don't work evenings or weekends. It's typical for there to be days or even weeks of going back and forth.
|
|
|
|
 |
|