Making an offer on REO property or a foreclosure in Newport Beach?


	Making an offer on a bank-owned property is not something to be taken lightly. Should you have any questions regarding real estate in Newport Beach, California, call me or send me an e-mail.

What is an REO?

"REO" is Real Estate Owned. These are houses which have gone through foreclosure that the bank or mortgage company presently holds. This is unlike real estate up for foreclosure auction. Surterre Properties has experience to share with foreclosures and bank owned properties in Newport Beach, California

Surterre Properties has experience to share with foreclosures and bank owned properties in Newport Beach, California

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 able to pay with cash in hand. And on top of all that, you'll receive the property totally as is. That might include current liens and even current occupants that need to be evicted.

A bank-owned property, by contrast, is a much cleaner and attractive option. The REO property was unable to find a buyer during foreclosure auction. The lender now owns it. The bank will attend to the elimination of tax liens, evict occupants if needed and generally organize 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 do not have to give a Transfer Disclosure Statement, a document that typically requires sellers to make known any defects of which they are informed. By hiring Surterre Properties, you can rest assured knowing all parties are fulfilling California state disclosure requirements.

Are REO properties a bargain in Newport Beach?

It's occasionally believed that any foreclosure must be a good deal and a possibility for easy money. This often isn't true. You have to be very careful about buying a repossession if your intent is make a profit. While it's true that the bank is often eager to sell it promptly, they are also motivated to get as much as they can for it.

Surterre Properties has experience to share with foreclosures and bank owned properties in Newport Beach, California

When considering 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. The bargains with money making potential exist, and many people do very well buying foreclosures. Still there are also many REOs that are not good buys and may lose money.

Prepared to make an offer?

Most lenders have a department dedicated to REO that you'll work with in buying REO property from them. Usually 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 concerning the condition of the property and what their process is for taking offers. Since banks most commonly sell REO properties "as is", you'll want to be sure and include an inspection contingency in your offer that gives you time to check for unseen damage and terminate the offer if you find it. As with making any offer on real estate, you'll make your offer more attractive if you can include documentation of your ability to pay, such as a pre-approval letter from a lender.

After you've made your offer, it's customary for the bank to make a counter offer. Then it will be your choice whether to accept their counter, or make another counter offer. Your deal might be settled in one day, but that's rare. Since offers and counter offers usually give the other party a day or longer to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer.