Purchasing REO property or a foreclosure in Central New York?
Foreclosed upon and bank owned property purchases require the assistance of an experienced professional. For more information, simply contact us
through our site or e-mail us
. We're happy to answer questions you have about real estate foreclosures.
What is a REO?
"REO" is Real Estate Owned. These are houses which have been foreclosed upon and are now possessed by the bank or mortgage company. This differs from a property 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 added during the foreclosure process. The buyer must also be prepared to pay with cash in hand. And on top of all that, you'll get the property 100% as is. That possibly could comprise of current liens and even current denizens that need to be evicted.
A bank-owned property, conversely, is a much neater and attractive deal. The REO property did not find a buyer during foreclosure auction. The bank now owns it. The lender will handle 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.
Take notice that REOs may be exempt from standard disclosure requirements. For example, in Nevada, it is optional for foreclosures to have a Property Disclosure Statement, a document that ordinarily requires sellers to reveal any defects they are informed of. By hiring Amodio Realty, Inc., you can rest assured knowing all parties are fulfilling New York state disclosure requirements.
Am I assured a bargain when investing in a REO property in Central New York?
It is sometimes believed that any foreclosure must be a good buy and an opportunity for guaranteed profit. This frequently isn't 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 often eager to offload it soon, they are also looking to minimize any losses.
Look carefully at the listing and sales prices of comparable properties in the neighborhood when considering the purchase of a REO. Factor in any repairs or remodeling necessary to prepare the house for resale or moving in. It is possible to find REO's with money-making potential, and many people do very well buying and selling foreclosures. However, there are also many REO's that are not good buys and may lose money.
All set to make an offer?
Most banks have staff dedicated to REO that you'll work with when buying REO property from them. Normally 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 discover as much as you can about their knowledge concerning the condition of the property and what their process is for taking offers. Since banks almost always sell REO properties "as is", you may want to 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 showing 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 goes for any type of real estate offer.)
Once you've submitted your offer, you can expect the bank to make a counter offer. Then it will be your choice whether to accept their counter, or offer a counter to the counter offer. Your transaction could be final in a single 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. Amodio Realty, Inc. is used to working around the schedules of this type of seller and will do everything possible to ensure there are no unnecessary delays.