Looking for REO property or a foreclosure in Rancho Palos Verdes?
Foreclosed upon and bank owned property purchases require the assistance of an experience professional.
For more information, you can contact me through my site or e-mail me. I'm happy to answer questions you have about real estate foreclosures.
What's an REO?
"REO" is an abbreviation for Real Estate Owned. These are houses which have gone 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 added during the foreclosure process. You must also be prepared to pay with cash in hand. And on top of all that, you'll receive the property totally as is. That possibly will involve standing liens and even current denizens that need to be put out.
A bank-owned property, on the contrary, is a much cleaner and attractive deal. The REO property was unable to find a buyer during foreclosure auction. Now the lender owns it. The bank will see to 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.
Note that REOs may be exempt from normal disclosure requirements.
For example, in California, banks are not required to give a Transfer Disclosure Statement,
a document that ordinarily requires sellers to reveal any defects of which they are informed.
By hiring Excel Funding Real Estate Services, Inc., you can rest assured knowing all parties are fulfilling California state disclosure requirements.
Am I guaranteed a good deal when investing in an REO property in Rancho Palos Verdes?
It's sometimes believed that any REO must be a bargain and a chance for easy money. This isn't necessarily true. You have to be prudent about buying a repossession if your intent is to make money. While it's true that the bank is typically anxious to sell it fast, they are also looking to get as much as they can for it.
Look closely at the listing and sales prices of similar properties in the neighborhood when making an offer on an REO. And factor in any repairs or upgrades 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. Still, 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. Usually the REO department will use a listing agent to get their REO properties listed on the local MLS.
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 their knowledge about the condition of the property and what their process is for accepting offers. Since banks most commonly sell REO properties "as is", you may want to include an inspection contingency in your offer that gives you time to check for hidden damage and withdraw 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.
Once you've presented your offer, it's customary for the bank to counter offer. At this point it will be your decision whether to accept their counter, or make another counter offer.
Understand, you'll be dealing with a process that usually involves a group of people at the bank, and they don't work evenings or weekends. It's quite common for there to be days or even weeks of negotiating back and forth.