Buying REO property or a foreclosure in Havana?
Savvy consumers will turn to a seasoned pro when considering a foreclosed property.
What's an REO?
"REO" is Real Estate Owned. These are properties which have been through foreclosure that the bank or mortgage company presently owns. This differs from real estate 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 added during the foreclosure process. The buyer must also be able to pay with cash in hand. Finally, you'll receive the property 100% as is. That possibly will consist of standing liens and even current denizens that need to be thrown out.
A bank-owned property, by contrast, is a more tidy and attractive transaction. The REO property didn't find a buyer during foreclosure auction. The lender 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.
Take notice that REOs may be exempt from standard disclosure requirements.
For example, in Texas, it is optional for foreclosures to have a Property Disclosure Statement,
a document that typically requires sellers to make known any defects they are knowledgeable of.
By hiring Harrell Realty, Inc, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Is REO property in Havana a bargain?
It's sometimes thought that any foreclosure must be a good buy and a chance for easy money. This isn't always the case. You have to be prudent about buying a REO if your intent is to make a profit. Even though the bank is usually anxious to offload it promptly, they are also looking to minimize any losses.
Look carefully at the listing and sales prices of competing properties in the neighborhood when making an offer on 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. However, there are also many REOs that are not good buys and may not be money makers.
Ready to make an offer?
Most banks have a department 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 frequently 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 learn as much as you can about their knowledge about the condition of the property and what their process is for taking offers. Since banks most commonly 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 demonstrating your ability to secure financing, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This is generally true for any type of real estate offer.)
Once you've submitted your offer, it's customary for the bank to counter offer. Then 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 several people at the bank, and they don't work evenings or weekends. It's not unusual for the process of offers and counter offers to take days or even weeks. Harrell Realty, Inc is used to working around the schedules of this type of seller and will do everything possible to ensure there are no undue delays.