Purchasing REO property or a foreclosure in Arlington?
|Just as with any home purchase, your wisest move is to hire a professional real estate agent. If you have any questions regarding real estate in Arlington, Virginia, call me or send me an e-mail.|
What's an REO?"REO" or Real Estate Owned are homes which have been through foreclosure that the bank or mortgage company currently holds. 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 added during the foreclosure process. The buyer must also be willing to pay with cash in hand. Finally, you'll receive the property completely as is. That possibly will include current liens and even current denizens that need to be kicked out.
A bank-owned property, on the other hand, is a much neater and attractive deal. The REO property didn't find a buyer during foreclosure auction. Now the bank owns it. The lender will handle the elimination of tax liens, evict occupants if needed and generally plan for the issuance of a title insurance policy to the buyer at closing.
Take notice 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 usually requires sellers to tell you about any defects of which they are knowledgeable. By hiring McEwen-Lunger.com, you can rest assured knowing all parties are fulfilling Virginia state disclosure requirements.
Am I assured a good deal when purchasing a bank owned property in Arlington?It is commonly thought that any foreclosure must be a steal and an opportunity for guaranteed profit. This isn't always true. You have to be very careful about buying a REO if your intent is profit from the sale. While it's true that the bank is often eager to sell it soon, they are also motivated to get as much as they can for it.
When contemplating the value of 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. The bargains with money making potential exist, and many people do very well buying and selling foreclosures. But there are also many REOs that are not good buys and not likely to turn a profit.
Ready to make an offer?Most lenders have a department dedicated to REO that you'll work with when buying REO property from them. To get their properties advertised on the local MLS, the lender will frequently use a listing agent.
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 about the condition of the property and what their process is for taking offers. Since banks almost always 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 hidden damage and cancel 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, you can expect the bank to respond with a counter offer. At this point it will be your choice whether to accept their counter, or submit another counter offer. Realize, you'll be working with a process that probably involves multiple people at the bank, and they don't work evenings or weekends. It's not unusual for the process of offers and counter offers to take days or even weeks. McEwen-Lunger.com is accustomed to these situations and will work to ensure there are no unnecessary delays.