Purchasing REO property or a foreclosure in DFW?
Foreclosed upon and bank owned property purchases require the assistance of an experience professional. For more information, just contact us. We're glad to answer any questions you have regarding real estate foreclosures.
What's an REO?
"REO" is an abbreviation for Real Estate Owned. These are properties which have completed the foreclosure process and are now possessed by the bank or mortgage company. This is different than a property up for foreclosure auction. Seeto Realty has experience to share with foreclosures and bank owned properties in DFW, Texas.
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. The buyer must also be ready to pay with cash in hand. And on top of all that, you'll get the property totally as is. That could include prevailing liens and even current residents that need to be kicked out.
A bank-owned property, on the other hand, is a more tidy and attractive option. The REO property did not find a buyer during foreclosure auction. The lender now owns it. The bank will handle the removal of tax liens, evict occupants if needed and generally organize 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 Texas, it is optional for foreclosures to have a Property Disclosure Statement, a document that usually requires sellers to reveal any defects of which they are aware. By hiring Seeto Realty, you can rest assured knowing all parties are fulfilling Texas state disclosure requirements. Am I guaranteed a good deal when investing in an REO property in DFW? It's occasionally believed that any foreclosure must be a steal and a chance for guaranteed profit. This simply isn't true. You have to be cautious about buying a repossession if your intent is profit from the sale. While it's true that the bank is often anxious to sell it quickly, they are also motivated to get as much as they can for it.
Seeto Realty has experience to share with foreclosures and bank owned properties in DFW, Texas. When contemplating 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. There are bargains with potential to make money, and many people do very well buying foreclosures. But there are also many REOs that are not good buys and may not be money makers.
Ready to make an offer?
Most mortgage companies have a department dedicated to REO that you'll work with in buying REO property from them. To get their properties advertised on the local MLS, the lender will typically hire a listing agent.
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 about the condition of the property and what their process is for receiving 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 unknown damage and retract 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 submitted your offer, you can expect the bank to make 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 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.
