"REO" stands for Real Estate Owned. These are houses which have gone through foreclosure that the bank or mortgage company currently owns. This differs from a property 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. The buyer must also be prepared to pay with cash in hand. Finally, you'll receive the property entirely as is. That possibly could comprise of existing liens and even current tenants that may require eviction.
A bank-owned property, on the contrary, is a more tidy and attractive proposition. The REO property did not find a buyer during foreclosure auction. The bank now owns it. The bank will take care of the elimination of tax liens, evict occupants if needed and generally plan for the issuance of a title insurance policy to the buyer at closing.
Take notice 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 tell you about any defects they are aware of. By hiring Orlando Real Estate Associates, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
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Investing in a bank-owned property is not something to be taken lightly. For more information, just contact us through our site or e-mail us. We are glad to address any questions you have about real estate foreclosures. |
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Is REO property in Orlando a bargain?
It is sometimes thought that any REO must be a steal and a chance for guaranteed profit. This simply isn't true. You have to be prudent about buying a REO if your intent is make a profit. While it's true that the bank is typically anxious to sell it soon, they are also motivated to get as much as they can for it.
When pondering the value of REO property, carefully analyze 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. There are bargains with potential to make money, and many people do very well flipping foreclosures. But there are also many REOs that are not good buys and may not be money makers.
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Prepared to make an offer?
Most lenders have a department dedicated to REO that you'll work with while buying REO property from them. Commonly 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 their knowledge about the condition of the property and what their process is for receiving offers. Since banks typically sell REO properties "as is", it may be in your best interest to include an inspection contingency in your offer that gives you time to check for unknown damage and retract 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 type of real estate offer.)
Once you've submitted 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 submit another counter offer. Your deal might be final in a single 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. Orlando Real Estate Associates is accustomed to these situations and will work to ensure there are no unnecessary delays.
Looking to buy a short sale?
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When a homeowner is upside down on their mortgage payments, it's becoming increasingly common for the lender to agree to a short sale, whereby the lender consents to release the mortgage for a sum less than what's owed. Should you have questions about real estate in Orlando, Florida, Call (407) 876-5771 or e-mail us. |
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Are short sales good deals?
From time to time, yes. Most people hear the words "short sale" and instinctively think of a seller that is in default and needs to sell their property fast to avert further financial problems. This is at times the case and can be an opportunity for a buyer to take advantage of another's misfortune. In contrast, a lender may consider a short sale even if the seller is current with their mortgage, but property values have depreciated. In these cases the discounted price may in fact be closer to actual market values instead of below.
Are you ready to buy a short sale property?
If you are ready to buy, whether it be a short sale or a typical home sale, Orlando Real Estate Associates is available for you. Use our experience and knowledge of real estate to make sure you're getting a fair deal and are protected during the whole purchase transaction.
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