Interested in REO property or a foreclosure in Bonita Springs?
Making an offer on a bank-owned property is not something to be taken lightly.
What is an REO?
"REO" is short for Real Estate Owned. These are properties which have gone through foreclosure and are presently owned by the bank or mortgage company. 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 accumulated during the foreclosure process. The buyer must also be willing to pay with cash in hand. To top everything off, you'll receive the property 100% as is. That could involve prevailing liens and even current residents that need to be put out.
A bank-owned property, conversely, is a more tidy and attractive deal. The REO property did not find a buyer during foreclosure auction. The bank now owns it. The bank will attend to 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.
Take notice that REOs may be exempt from typical disclosure requirements. For example, in Texas, it is optional for foreclosures to have a Property Disclosure Statement, a document that normally requires sellers to make known any defects they are aware of. By hiring John R. Wood Inc. Realtors, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Are REO properties a bargain in Bonita Springs?
It's commonly assumed that any foreclosure must be a good buy and a chance for easy money. This simply isn't true. You have to be cautious about buying a REO if your intent is make a profit. Even though the bank is usually anxious to sell it quickly, they are also looking 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. The bargains with money making potential exist, and many people do very well buying foreclosures. However there are also many REOs that are not good buys and not likely to turn a profit.
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 their knowledge concerning the condition of the property and what their process is for receiving offers. Since banks most commonly 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 cancel the offer if you find it. If, as a buyer, you can provide documentation demonstrating 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.)
After you've submitted your offer, it's customary for the bank to make a counter offer. From there it will be your choice whether to accept their counter, or offer a counter to the counter offer. Your deal might be settled in one 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. John R. Wood Inc. Realtors is accustomed to these situations and will work to ensure there are no undue delays.
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. The bargains with money making potential exist, and many people do very well buying foreclosures. However there are also many REOs that are not good buys and not likely to turn a profit.
