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Buying REO property or a foreclosure in Milton?
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Just as with any property purchase, your wisest move is to hire a professional real estate agent.
For more information, you can contact me through my site or e-mail me. I'm glad to answer questions you have about real estate foreclosures.
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What's an REO?
"REO" or Real Estate Owned are homes which have been foreclosed upon that the bank or mortgage company presently owns. This is different than real estate 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 willing to pay with cash in hand. And on top of all that, you'll get the property totally as is. That may consist of standing liens and even current tenants that need to be thrown out.
A bank-owned property, on the contrary, is a more tidy and attractive deal. The REO property did not find a buyer during foreclosure auction. The bank now owns it. The bank will handle the elimination of tax liens, evict occupants if needed and generally arrange for the issuance of a title insurance policy to the buyer at closing.
Do be aware that REOs may be exempt from standard disclosure requirements.
For example, in North Carolina, it is optional for foreclosures to have a Property Disclosure Statement,
a document that ordinarily requires sellers to tell you about any defects of which they are aware.
By hiring Kelley Rege Properties INC., you can rest assured knowing all parties are fulfilling Massachusetts state disclosure requirements.
Am I guaranteed a low price when investing in a bank owned property in Milton?
It's occasionally presumed that any foreclosure must be a steal and an opportunity for easy money. This isn't always true. You have to be very careful about buying a repossession if your intent is make a profit. Even though the bank is typically eager to offload it quickly, they are also looking to get as much as they can for it.
Look carefully at the listing and sales prices of competing properties in the neighborhood when making an offer on 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. Still there are also many REOs that are not good buys and may lose money.
Prepared to make an offer?
Most mortgage companies have staff dedicated to REO that you'll work with while buying REO property from them. Typically the REO department will use a listing agent to get their REO properties listed on the local MLS.
Before 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 regarding the condition of the property and what their process is for getting offers. Since banks almost always 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 unknown damage and cancel the offer if you find it.
If, as a buyer, you can provide documentation proving 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 real estate offer.)
Once you've submitted 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 make another counter offer.
Be aware, you'll be dealing with a process that most likely involves multiple people at the bank, and they don't work evenings or weekends. It's typical for there to be days or even weeks of going back and forth.
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