Buying REO property or a foreclosure in Ewing?
Making an offer on a bank-owned property is not something to be taken casually.
What is an REO?
"REO" or Real Estate Owned are houses which have been through foreclosure that the bank or mortgage company currently owns. This is different than 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 amassed during the foreclosure process. You must also be able to pay with cash in hand. To top everything off, you'll get the property totally as is. That possibly may consist of standing liens and even current tenants that need to be evicted.
A bank-owned property, on the other hand, is a more tidy and attractive transaction. The REO property did not find a buyer during foreclosure auction. The bank now owns it. The lender will deal with the removal of tax liens, evict occupants if needed and generally plan for the issuance of a title insurance policy to the buyer at closing.
Note that REOs may be exempt from typical disclosure requirements.
For example, in North Carolina, it is optional for foreclosures to have a Property Disclosure Statement,
a document that typically requires sellers to tell you about any defects they are informed of.
By hiring SBR Realty LLC, you can rest assured knowing all parties are fulfilling New Jersey state disclosure requirements.
Are REO properties a bargain in Ewing?
It's commonly assumed that any REO must be a bargain and a possibility for easy money. This isn't always the case. You have to be very careful about buying a REO if your intent is to make money. Even though the bank is often anxious to sell it promptly, they are also motivated to minimize any losses.
When contemplating the value of REO property, 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.
It is possible to find REOs with money-making potential, and many people do very well flipping foreclosures. Still, there are also many REOs that are not good buys and not likely to turn a profit.
All set to make an offer?
Most banks have staff dedicated to REO that you'll work with when buying REO property from them. Usually the REO department will use a listing agent to get their REO properties listed on the local MLS.
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 about the condition of the property and what their process is for receiving offers. Since banks almost always sell REO properties "as is", it's often prudent to include an inspection contingency in your offer that gives you time to check for hidden damage and cancel the offer if you find it.
As with making any offer on real estate, providing documentation showing your ability to pay 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. Then it will be up to you to decide whether to accept their counter, or submit another counter offer.
Your transaction might be final in one day, but that's rare. Since offers and counter offers usually give the other party a day or longer to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer. SBR Realty LLC is used to working around the schedules of this type of seller and will do everything possible to ensure there are no unnecessary delays.