Interested in REO property or a foreclosure in DADEVILLE?
Just as with any home purchase, your smartest move is to hire a professional real estate agent.
What is an REO?
"REO" stands for Real Estate Owned. These are homes which have gone through foreclosure and are now owned by the bank or mortgage company. 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 willing to pay with cash in hand. To top everything off, you'll accept the property completely as is. That possibly may consist of prevailing liens and even current residents that may require eviction.
A bank-owned property, conversely, is a much neater and attractive option. The REO property didn't find a buyer during foreclosure auction. The lender now owns it. The lender will take care of 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.
You should be aware that REOs may be exempt from standard disclosure requirements. For example, in California, banks are not required to give a Transfer Disclosure Statement, a document that normally requires sellers to tell you about any defects they are informed of. By hiring Gillies Realty, you can rest assured knowing all parties are fulfilling Alabama state disclosure requirements.
Are REO properties a bargain in Tallapoosa County?
It is occasionally presumed that any REO must be a good buy and a possibility for guaranteed profit. This frequently isn't true. You have to be prudent about buying a REO if your intent is make money. While it's true that the bank is typically eager to offload it soon, they are also motivated to get as much as they can for it.
When pondering the value of REO property, you need to look closely at 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 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. 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 find out as much as you can about their knowledge concerning the condition of the property and what their process is for accepting offers. Since banks usually sell REO properties "as is", it's often prudent to include an inspection contingency in your offer that gives you time to check for unknown damage and withdraw 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. At this point it will be your choice whether to accept their counter, or submit another counter offer. Be aware, you'll be dealing with a process that probably involves a group of people at the bank, and they don't work evenings or weekends. It's not uncommon for there to be days or even weeks of negotiating back and forth. Gillies Realty is are used to working around the schedules of this type of seller and will do everything possible to ensure there are no unnecessary delays.
When pondering the value of REO property, you need to look closely at 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 lose money.
