Buying REO property or a foreclosure in Flower Mound?
Foreclosed upon and bank owned property purchases require the assistance of an experience professional.
For more information, just
contact us through our site or
e-mail us. We're glad to answer any questions you have regarding real estate foreclosures.
What's an REO?
"REO" is Real Estate Owned. These are properties which have gone through foreclosure that the bank or mortgage company presently possesses. This is unlike 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. The buyer must also be willing to pay with cash in hand. To top everything off, you'll accept the property totally as is. That possibly could consist of current liens and even current denizens that may require eviction.
A bank-owned property, on the other hand, is a much cleaner and attractive option. The REO property did not find a buyer during foreclosure auction. Now the lender owns it. The bank will take care of 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.
Do be aware 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 ordinarily requires sellers to disclose any defects of which they are knowledgeable.
By hiring AmeriGroup Real Estate, you can rest assured knowing all parties are fulfilling Texas state disclosure requirements.
Am I guaranteed a bargain when buying an REO property in Flower Mound?
It's commonly presumed that any foreclosure must be a steal and a possibility for guaranteed profit. This frequently isn't true. You have to be prudent about buying a repossession if your intent is to make money. Even though the bank is typically anxious to sell it soon, they are also motivated to minimize any losses.
When contemplating the value of a foreclosure, 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.
It is possible to find REOs with money-making potential, 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.
All set to make an offer?
Most banks have a department dedicated to REO that you'll work with when 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 learn as much as you can about what they know regarding the condition of the property and what their process is for taking offers. Since banks usually sell REO properties "as is", you may want to include an inspection contingency in your offer that gives you time to check for unknown damage and withdraw the offer if you find it.
As with making any offer on real estate, your offer may be more attractive if you can include documentation of your ability to pay, such as a pre-approval letter from a lender.
Once you've presented your offer, it's customary for the bank to respond with a counter offer. At this point it will be your choice whether to accept their counter, or make another counter offer.
Understand, you'll be working with a process that generally involves multiple people at the bank, and they don't work evenings or weekends. It's not unusual for there to be days or even weeks of negotiating back and forth.