Interested in REO property or a foreclosure in Canton?
Foreclosed upon and bank owned property purchases require the assistance of an experience professional.
For more information, you can contact us
through our site or e-mail us
. We're happy to address any questions you have regarding real estate foreclosures.
What is an REO?
"REO" or Real Estate Owned are houses which have been through foreclosure that the bank or mortgage company presently possesses. This is not the same as 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 accrued during the foreclosure process. You must also be willing to pay with cash in hand. And on top of all that, you'll get the property completely as is. That may consist of existing liens and even current occupants that may require eviction.
A bank-owned property, by contrast, is a much neater and attractive transaction. The REO property was unable to find a buyer during foreclosure auction. The bank now owns it. The bank will handle 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.
Do be aware that REOs may be exempt from typical disclosure requirements.
In California, for example, banks are exempt from giving a Transfer Disclosure Statement,
a document that usually requires sellers to tell you about any defects of which they are aware.
By hiring Pitts Realty, you can rest assured knowing all parties are fulfilling Texas state disclosure requirements.
Am I assured a good deal when investing in a bank owned property in Canton?
It is commonly thought that any foreclosure must be a good buy and an opportunity for guaranteed profit. This isn't necessarily the case. You have to be very careful about buying a REO if your intent is to profit from the sale. Even though the bank is often eager to offload it soon, they are also looking to minimize any losses.
When contemplating what to pay for a foreclosure, 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. However, there are also many REOs that are not good buys and may not be money makers.
Time to make an offer?
Most mortgage companies have a department dedicated to REO that you'll work with while buying REO property from them. Typically 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 find out 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", it's often prudent to include an inspection contingency in your offer that gives you time to check for unseen damage and withdraw the offer if you find it.
If, as a buyer, you can provide documentation demonstrating your ability to secure financing, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This holds for any type of real estate offer.)
Once you've made your offer, it's customary for the bank to counter offer. Then it will be your decision whether to accept their counter, or submit another counter offer.
Your transaction might be settled 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. Pitts Realty is used to working around the schedules of this type of seller and will do everything possible to ensure there are no undue delays.