Buying REO property or a foreclosure?


	Just as with any home purchase, your wisest move is to hire a professional real estate agent. For more information, simply contact us through our site or e-mail us. We're glad to answer any questions you have about real estate foreclosures.

What is an REO?

"REO" or Real Estate Owned are houses which have been foreclosed upon and are currently held by the bank or mortgage company. This is unlike real estate up for foreclosure auction. Village Manor Realty has experience to share with foreclosures and bank owned properties in Floral Park, New York

Village Manor Realty has experience to share with foreclosures and bank owned properties in Floral Park, New York

If you buy 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 willing to pay with cash in hand. And on top of all that, you'll accept the property completely as is. That could involve existing liens and even current residents that may require removal.

A bank-owned property, on the contrary, is a much neater and attractive deal. The REO property was unable to find a buyer during foreclosure auction. Now the bank owns it. The lender 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 normal disclosure requirements. For example, in North Carolina, it is optional for foreclosures to have a Property Disclosure Statement, a document that normally requires sellers to tell you about any defects they are knowledgeable of. By hiring Village Manor Realty, you can rest assured knowing all parties are fulfilling New York state disclosure requirements.

Am I guaranteed a good deal when purchasing a bank owned property in Floral Park?

It's frequently presumed that any REO must be a good buy and an opportunity for guaranteed profit. This frequently 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 eager to sell it promptly, they are also motivated to minimize any losses.

Village Manor Realty has experience to share with foreclosures and bank owned properties in Floral Park, New York

Look closely at the listing and sales prices of similar homes in the neighborhood when making an offer on an REO. And factor in any repairs or remodeling necessary to prepare the house for resale or moving in. 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.

Ready to make an offer?

Most banks have a department dedicated to REO that you'll work with while buying REO property from them. To get their properties advertised on the local MLS, the lender will usually hire a listing agent.

Prior to 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 may want to include an inspection contingency in your offer that gives you time to check for unknown damage and retract the offer if you find it. If, as a buyer, you can provide documentation demonstrating your ability to pay, 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.)

Once you've submitted your offer, you can expect the bank to counter offer. From there it will be your decision whether to accept their counter, or offer a counter to the counter offer. Realize, you'll be contending with a process that usually involves a group of people at the bank, and they don't work evenings or weekends. It's quite common for the process of offers and counter offers to take days or even weeks.