Making an offer on REO property or a foreclosure in Plantation?

What's an REO?

"REO" or Real Estate Owned are properties which have been foreclosed upon that the bank or mortgage company now possesses. This is not the same as a property 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 prepared to pay with cash in hand. To top everything off, you'll receive the property totally as is. That possibly will consist of existing liens and even current tenants that need to be kicked out.

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. Now the lender owns it. The lender 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 standard disclosure requirements. For example, in California, banks do not have to give a Transfer Disclosure Statement, a document that typically requires sellers to reveal any defects of which they are knowledgeable. By hiring United Realty Group, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.

Am I guaranteed a bargain when buying a bank owned property in Plantation?

It's occasionally thought that any REO must be a good deal and a possibility for guaranteed profit. This often isn't true. You have to be prudent about buying a repossession if your intent is to make a profit. Even though the bank is often anxious to sell it quickly, they are also looking to get as much as they can for it.

When considering what to pay for REO property, carefully analyze 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. There are bargains with potential to make money, and many people do very well flipping foreclosures. Still, there are also many REOs that are not good buys and may lose money.

All set 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 learn as much as you can about what they know concerning the condition of the property and what their process is for receiving offers. Since banks almost always sell REO properties "as is", it's often prudent 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, 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 respond with a counter offer. From there it will be up to you to decide whether to accept their counter, or submit another counter offer. Your transaction could be final in one day, but that's usually not the case. 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.