Looking for REO property or a foreclosure in Huntsville?
Smart consumers will turn to a seasoned pro when considering a foreclosed property.
What's an REO?
"REO" or Real Estate Owned are homes which have been foreclosed upon and are presently owned by the bank or mortgage company. This is different than 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 accumulated during the foreclosure process. The buyer must also be ready to pay with cash in hand. To top everything off, you'll receive the property 100% as is. That possibly will consist of standing liens and even current denizens that need to be removed.
A bank-owned property, by contrast, 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 elimination 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 normal disclosure requirements. For example, in Nevada, it is optional for foreclosures to have a Property Disclosure Statement, a document that typically requires sellers to reveal any defects of which they are aware. By hiring RISE Real Estate - Parkway Plaza, you can rest assured knowing all parties are fulfilling Alabama state disclosure requirements.
Is REO property in Huntsville a bargain?
It is sometimes assumed that any foreclosure must be a bargain and a chance for easy money. This frequently isn't true. You have to be very careful about buying a REO if your intent is make money. While it's true that the bank is often anxious to offload it quickly, they are also motivated to get as much as they can for it.
Look carefully at the listing and sales prices of competing homes in the neighborhood when considering the purchase of an REO. And factor in any repairs or remodeling 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. But there are also many REOs that are not good buys and may lose money.
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. Commonly 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 about the condition of the property and what their process is for getting offers. Since banks most commonly sell REO properties "as is", it may be in your best interest to 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, providing documentation proving your ability to secure financing may make your offer more attractive, such as a pre-approval letter from a lender.
After you've presented your offer, you can expect the bank to respond with a counter offer. From there it will be up to you to decide whether to accept their counter, or make another counter offer. Understand, you'll be dealing with a process that probably involves several people at the bank, and they don't work evenings or weekends. It's typical for there to be days or even weeks of negotiating back and forth.
Call Landa at 800-616-1203 or email Landa@MyHuntsvilleHomes.com to receive a list of homes available that meet your personal requirements.
Look carefully at the listing and sales prices of competing homes in the neighborhood when considering the purchase of an REO. And factor in any repairs or remodeling 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. But there are also many REOs that are not good buys and may lose money.