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Interested in REO property or a foreclosure in Big Pine Key?
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Foreclosed upon and bank owned property purchases require the assistance of an experience professional.
For more information, you can contact me through my site or e-mail me. I'm glad to address any questions you have regarding real estate foreclosures.
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What's an REO?
"REO" means Real Estate Owned. These are houses which have been through foreclosure and are now held 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 accrued during the foreclosure process. The buyer must also be prepared to pay with cash in hand. Finally, you'll accept the property completely as is. That possibly could consist of standing liens and even current residents that need to be thrown out.
A bank-owned property, by contrast, is a more tidy and attractive proposition. The REO property didn't find a buyer during foreclosure auction. The bank now owns it. The bank will attend to the removal of tax liens, evict occupants if needed and generally arrange 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 Texas, it is optional for foreclosures to have a Property Disclosure Statement,
a document that typically requires sellers to make known any defects they are informed of.
By hiring ERA Lower Keys Realty, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Am I assured a low price when investing in an REO property in Big Pine Key?
It is commonly assumed that any foreclosure must be a steal and a chance for guaranteed profit. This isn't necessarily the case. You have to be prudent about buying a REO if your intent is make a profit. Even though the bank is often anxious to sell it quickly, they are also looking to minimize any losses.
Look closely at the listing and sales prices of comparable 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.
There are bargains with potential to make money, and many people do very well flipping foreclosures. However there are also many REOs that are not good buys and may not be money makers.
Ready to make an offer?
Most mortgage companies have staff 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 usually 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 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 usually sell REO properties "as is", it's often prudent to include an inspection contingency in your offer that gives you time to check for unknown damage and cancel the offer if you find it.
As with making any offer on real estate, providing documentation proving your ability to pay may make your offer more attractive, such as a pre-approval letter from a lender.
Once you've submitted your offer, you can expect the bank to make a counter offer. At this point it will be your choice whether to accept their counter, or submit another counter offer.
Your transaction could be final in one day, but that's usually not the case. 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. ERA Lower Keys Realty is accustomed to these situations and will work to ensure there are no undue delays.
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