Purchasing REO property or a foreclosure in LAKELAND?
Savvy consumers will turn to a seasoned pro when considering a foreclosed property.
What's an REO?
"REO" or Real Estate Owned are properties which have been through foreclosure that the bank or mortgage company currently possesses. This differs from 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 accumulated during the foreclosure process. You must also be able to pay with cash in hand. To top everything off, you'll get the property completely as is. That might comprise of standing liens and even current residents that may require removal.
A bank-owned property, on the contrary, is a more tidy and attractive transaction. The REO property was unable to find a buyer during foreclosure auction. The bank now owns it. The lender will take care of the removal of tax liens, evict occupants if needed and generally organize for the issuance of a title insurance policy to the buyer at closing.
Do be aware that REOs may be exempt from normal disclosure requirements.
For example, in North Carolina, it is optional for foreclosures to have a Property Disclosure Statement,
a document that typically requires sellers to make known any defects of which they are knowledgeable.
By hiring Jim Charpie Property Management, LLC, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Is REO property in LAKELAND a bargain?
It's occasionally thought that any foreclosure must be a bargain and a chance for guaranteed profit. This isn't always the case. You have to be cautious about buying a REO if your intent is make money. Even though the bank is often eager to sell it quickly, they are also looking to get as much as they can for it.
When contemplating what to pay for 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.
The bargains with money making potential exist, and many people do very well buying and selling foreclosures. However there are also many REOs that are not good buys and may lose money.
Prepared to make an offer?
Most banks have a department dedicated to REO that you'll work with when buying REO property from them. Normally 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 learn as much as you can about what they know regarding the condition of the property and what their process is for receiving offers. Since banks almost always 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 holds for any real estate offer.)
After you've submitted your offer, it's customary for the bank to make a counter offer. At this point it will be up to you to decide whether to accept their counter, or offer a counter to the counter offer.
Be aware, you'll be working with a process that generally involves several people at the bank, and they don't work evenings or weekends. It's typical for there to be days or even weeks of negotiating back and forth.
Jim Charpie Property Management, LLC 5337 N SOCRUM LOOP RD #436 LAKELAND, FL 33809
When contemplating what to pay for 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.
The bargains with money making potential exist, and many people do very well buying and selling foreclosures. However there are also many REOs that are not good buys and may lose money.
