Looking for REO property or a foreclosure in Granite Falls?
|Investing in a bank-owned property is not something to be taken lightly.|
What is an REO?"REO" or Real Estate Owned are properties which have gone through foreclosure and are now owned by the bank or mortgage company. This is different than 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. You must also be willing to pay with cash in hand. And on top of all that, you'll receive the property entirely as is. That might include prevailing liens and even current denizens that may require removal.
A bank-owned property, conversely, is a more tidy and attractive deal. The REO property didn't find a buyer during foreclosure auction. The lender now owns it. The lender will take care of 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.
You should be aware that REOs may be exempt from typical disclosure requirements. For example, in California, banks do not have to give a Transfer Disclosure Statement, a document that normally requires sellers to tell you about any defects of which they are knowledgeable. By hiring Orrell Associates, Inc., you can rest assured knowing all parties are fulfilling North Carolina state disclosure requirements.
Are REO properties a bargain in Granite Falls?It is frequently thought that any foreclosure must be a steal and an opportunity for easy money. This frequently isn't true. You have to be cautious about buying a repossession if your intent is to make money off of it. While it's true that the bank is often eager to sell it quickly, they are also motivated to get as much as they can for it.
When considering what to pay for REO property, you need to look closely at 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. It is possible to find REOs with money-making potential, and many people do very well flipping foreclosures. However there are also many REOs that are not good buys and may lose money.
Time to make an offer?Most banks have a department 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.
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 what they know regarding the condition of the property and what their process is for taking offers. Since banks most commonly sell REO properties "as is", you'll want to be sure and include an inspection contingency in your offer that gives you time to check for unseen damage and cancel the offer if you find it. If, as a buyer, you can provide documentation showing your ability to pay, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This goes for any real estate offer.)
After you've presented your offer, it's customary for the bank to respond with a counter offer. From there it will be your choice whether to accept their counter, or offer a counter to the counter offer. Your transaction might be final in one 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.