Buying REO property or a foreclosure in Sunset Beach?
Savvy consumers will turn to a seasoned pro when considering a foreclosed property.
If you have questions regarding real estate in Sunset Beach, North Carolina, call me
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What is an REO?
"REO" is short for Real Estate Owned. These are properties which have completed the foreclosure process 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 ready to pay with cash in hand. Finally, you'll accept the property entirely as is. That possibly could include prevailing liens and even current tenants that need to be put out.
A bank-owned property, on the contrary, is a much neater and attractive option. The REO property was unable to find a buyer during foreclosure auction. Now the lender owns it. The lender will deal with the elimination of tax liens, evict occupants if needed and generally prepare 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 instance, in California, banks do not have to give a Transfer Disclosure Statement,
a document that usually requires sellers to reveal any defects they are knowledgeable of.
By hiring Fred Thorne Realty LLC, you can rest assured knowing all parties are fulfilling North Carolina state disclosure requirements.
Am I guaranteed a good deal when buying a bank owned property in Sunset Beach?
It is frequently presumed that any REO must be a good deal and a chance for easy money. This often isn't true. You have to be prudent about buying a repossession if your intent is to profit from the sale. 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.
Look carefully 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.
There are bargains with potential to make money, and many people do very well flipping foreclosures. However, there are also many REOs that are not good buys and may not be money makers.
Prepared to make an offer?
Most lenders have staff dedicated to REO that you'll work with while buying REO property from them. To get their properties advertised on the local MLS, the lender will usually 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 find out as much as you can about what they know 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, providing documentation showing your ability to pay may make your offer more attractive, such as a pre-approval letter from a lender.
After you've presented your offer, it's customary for the bank to counter offer. Then it will be your decision whether to accept their counter, or make another counter offer.
Your transaction could 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. Fred Thorne Realty LLC is accustomed to these situations and will work to ensure there are no undue delays.