Buying REO property or a foreclosure in Corona?
Just as with any home purchase, your smartest move is to hire a professional real estate agent.
For more information, just contact me
through my site or e-mail me
. I'm happy to address questions you have about real estate foreclosures.
What is an REO?
"REO" is Real Estate Owned. These are properties which have gone through foreclosure that the bank or mortgage company currently owns. This is not the same as 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. You must also be able to pay with cash in hand. To top everything off, you'll accept the property completely as is. That possibly may include standing liens and even current residents that may require expulsion.
A bank-owned property, on the contrary, is a much neater and attractive proposition. The REO property was unable to find a buyer during foreclosure auction. The lender now owns it. The lender will handle 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.
Note that REOs may be exempt from normal disclosure requirements.
In California, for example, banks are exempt from giving a Transfer Disclosure Statement,
a document that normally requires sellers to disclose any defects of which they are informed.
By hiring Tarbell Realtors, you can rest assured knowing all parties are fulfilling California state disclosure requirements.
Am I assured a low price when buying a bank owned property in Corona?
It is occasionally believed that any foreclosure must be a good deal and an opportunity for guaranteed profit. This frequently isn't true. You have to be cautious about buying a repossession if your intent is to make money off of it. Even though the bank is usually eager to offload it quickly, they are also looking to minimize any losses.
Look carefully at the listing and sales prices of competing properties 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. Still, there are also many REOs that are not good buys and may not be money makers.
Prepared to make an offer?
Most banks have staff dedicated to REO that you'll work with while buying REO property from them. Usually 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 find out as much as you can about their knowledge concerning the condition of the property and what their process is for receiving 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 hidden damage and retract 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, it's customary for the bank to respond with a counter offer. Then it will be up to you to decide whether to accept their counter, or make another counter offer.
Your transaction might be settled 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. Tarbell Realtors is used to working around the schedules of this type of seller and will do everything possible to ensure there are no unnecessary delays.