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Making an offer on REO property or a foreclosure in New Braunfels?
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Smart consumers will turn to a seasoned pro when considering the purchase of a foreclosed property.
If you have questions regarding real estate in New Braunfels, Texas, call me or send me an e-mail.
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What's an REO?
"REO" stands for Real Estate Owned. These are properties which have completed the foreclosure process and are now held by the bank or mortgage company. This is unlike 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 accumulated during the foreclosure process. You must also be prepared to pay with cash in hand. And on top of all that, you'll accept the property 100% as is. That could include current liens and even current residents that may require eviction.
A bank-owned property, conversely, is a much neater and attractive deal. The REO property didn't find a buyer during foreclosure auction. Now the bank owns it. The bank will handle the elimination of tax liens, evict occupants if needed and generally prepare 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 Nevada, it is optional for foreclosures to have a Property Disclosure Statement,
a document that usually requires sellers to make known any defects they are knowledgeable of.
By hiring The Lyons Group, you can rest assured knowing all parties are fulfilling Texas state disclosure requirements.
Am I guaranteed a good deal when buying an REO property in New Braunfels?
It's frequently thought that any REO must be a steal and a chance for guaranteed profit. This isn't always the case. You have to be prudent about buying a REO if your intent is to make money off of it. Even though the bank is typically anxious to offload it fast, they are also looking to get as much as they can for it.
When pondering 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.
There are bargains with potential to make money, and many people do very well buying foreclosures. However there are also many REOs that are not good buys and may not be money makers.
Ready to make an offer?
Most lenders have a department dedicated to REO that you'll work with when buying REO property from them. To get their properties advertised on the local MLS, the lender will frequently contract with a listing agent.
Prior to 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 what they know concerning the condition of the property and what their process is for taking offers. Since banks typically sell REO properties "as is", it's often prudent 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.
As with making any offer on real estate, your offer may be more attractive if you can include documentation of your ability to pay, such as a pre-approval letter from a lender.
Once you've presented 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 offer a counter to the counter offer.
Understand, you'll be dealing with a process that generally involves multiple people at the bank, and they don't work evenings or weekends. It's quite common for there to be days or even weeks of negotiating back and forth.
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"Expect A Higher Standard"
The Lyons Group Keller Williams Realty
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