Interested in REO property or a foreclosure in Orange County?
Investing in a bank-owned property is not something to be taken casually. For more information, you can contact me
through my site or e-mail me
. I'm glad to answer any questions you have regarding real estate foreclosures.
What's an REO?
"REO" or Real Estate Owned are properties which have been foreclosed upon that the bank or mortgage company now holds. 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 amassed during the foreclosure process. You must also be willing to pay with cash in hand. To top everything off, you'll get the property entirely as is. That possibly could comprise of standing liens and even current tenants that need to be removed.
A bank-owned property, on the contrary, is a much neater and attractive option. The REO property did not find a buyer during foreclosure auction. The lender now owns it. The bank will deal with 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.
Note 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 usually requires sellers to make known any defects of which they are informed. By hiring The Yaruss Group, you can rest assured knowing all parties are fulfilling California state disclosure requirements.
Is REO property in Orange County a bargain?
It's sometimes believed that any foreclosure must be a good buy and an opportunity for easy money. This often isn't true. You have to be very careful about buying a repossession if your intent is to make money off of it. Even though the bank is often anxious to sell it fast, they are also motivated to minimize any losses.
Look closely 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 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 and selling foreclosures. However, there are also many REOs that are not good buys and may lose money.
Ready to make an offer?
Most banks have staff dedicated to REO that you'll work with in buying REO property from them. Typically 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 what they know regarding the condition of the property and what their process is for getting 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 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 is generally true for any real estate offer.)
Once you've submitted your offer, you can expect the bank to make a counter offer. At this point it will be your choice whether to accept their counter, or offer a counter to the counter offer. Understand, you'll be dealing with a process that probably involves a group of people at the bank, and they don't work evenings or weekends. It's typical for there to be days or even weeks of going back and forth. The Yaruss Group is accustomed to these situations and will work to ensure there are no undue delays.