Making an offer on REO property or a foreclosure in Durham?
Just as with any home purchase, your smartest move is to hire a professional real estate agent.
What is an REO?
"REO" or Real Estate Owned are homes which have been foreclosed upon that the bank or mortgage company currently owns. This is not the same as 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 added during the foreclosure process. The buyer must also be prepared to pay with cash in hand. And on top of all that, you'll receive the property totally as is. That possibly could comprise of current liens and even current occupants that need to be evicted.
A bank-owned property, conversely, is a much cleaner and attractive option. The REO property didn't find a buyer during foreclosure auction. The bank now owns it. The bank will take care of the removal of tax liens, evict occupants if needed and generally prepare for the issuance of a title insurance policy to the buyer at closing.
Do be aware that REOs may be exempt from typical disclosure requirements.
For example, in North Carolina, it is optional for foreclosures to have a Property Disclosure Statement,
a document that usually requires sellers to reveal any defects they are aware of.
By hiring FONVILLE MORISEY REALTY, you can rest assured knowing all parties are fulfilling North Carolina state disclosure requirements.
Is REO property in Durham a bargain?
It is occasionally thought that any REO must be a steal and a chance for easy money. This often isn't true. You have to be cautious about buying a REO if your intent is profit from the sale. While it's true that the bank is often eager to offload it soon, they are also motivated to get as much as they can for it.
Look closely at the listing and sales prices of comparable homes in the neighborhood when considering the purchase of an REO. And factor in any repairs or remodeling necessary to prepare the house for resale or moving in.
It is possible to find REOs with money-making potential, and many people do very well buying foreclosures. But there are also many REOs that are not good buys and not likely to turn a profit.
Ready to make an offer?
Most mortgage companies have staff dedicated to REO that you'll work with in buying REO property from them. To get their properties advertised on the local MLS, the lender will often 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 discover 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 may want to include an inspection contingency in your offer that gives you time to check for hidden damage and terminate the offer if you find it.
As with making any offer on real estate, you'll make your offer more attractive if you can include documentation of your ability to pay, such as a pre-approval letter from a lender.
After you've made your offer, you can expect the bank to counter offer. At this point it will be up to you to decide whether to accept their counter, or submit another counter offer.
Your transaction might be settled in a single day, but that's usually not the case. Since offers and counter offers usually give the other party a day or longer to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer. FONVILLE MORISEY REALTY is are used to working around the schedules of this type of seller and will do everything possible to ensure there are no undue delays.
FONVILLE MORISEY REALTY 1304 Hwy 54 West Durham, NC 27707
Look closely at the listing and sales prices of comparable homes in the neighborhood when considering the purchase of an REO. And factor in any repairs or remodeling necessary to prepare the house for resale or moving in.
It is possible to find REOs with money-making potential, and many people do very well buying foreclosures. But there are also many REOs that are not good buys and not likely to turn a profit.
