Making an offer on REO property or a foreclosure in Louisville?
Foreclosed upon and bank owned property purchases require the assistance of an experience professional.
What is an REO?
"REO" or Real Estate Owned are houses which have gone through foreclosure and are presently owned by the bank or mortgage company. This is unlike a property 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 accumulated during the foreclosure process. You must also be able to pay with cash in hand. To top everything off, you'll accept the property totally as is. That could comprise of standing liens and even current occupants that need to be put out.
A bank-owned property, by contrast, is a much neater and attractive option. The REO property did not find a buyer during foreclosure auction. The bank now owns it. The bank will deal with 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 example, in Texas, it is optional for foreclosures to have a Property Disclosure Statement,
a document that typically requires sellers to reveal any defects they are aware of.
By hiring Chris Coury Realtors Inc, you can rest assured knowing all parties are fulfilling Kentucky state disclosure requirements.
Is REO property in Louisville a bargain?
It's sometimes believed that any REO must be a good buy and an opportunity for guaranteed profit. This often isn't true. You have to be prudent about buying a REO if your intent is to profit from the sale. Even though the bank is often anxious to sell it promptly, they are also motivated to get as much as they can for it.
Look carefully at the listing and sales prices of competing properties in the neighborhood when considering the purchase of an REO. And factor in any repairs or upgrades necessary to prepare the house for resale or moving in.
It is possible to find REOs with money-making potential, and many people do very well buying and selling foreclosures. Still, there are also many REOs that are not good buys and may not be money makers.
Time to make an offer?
Most banks have a department dedicated to REO that you'll work with in buying REO property from them. Commonly 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 their knowledge about the condition of the property and what their process is for accepting offers. Since banks most commonly 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 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.
Once you've submitted your offer, it's customary for the bank to make a counter offer. From there it will be your decision whether to accept their counter, or submit another counter offer.
Realize, you'll be working with a process that usually involves several people at the bank, and they don't work evenings or weekends. It's typical for the process of offers and counter offers to take days or even weeks.