Looking for REO property or a foreclosure in Dayton?
Smart consumers will turn to a seasoned pro when considering a foreclosed property.
What's an REO?
"REO" stands for Real Estate Owned. These are houses which have been through foreclosure and are now owned by the bank or mortgage company. This is different than a property 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 amassed during the foreclosure process. You must also be prepared to pay with cash in hand. Finally, you'll receive the property entirely as is. That might involve existing liens and even current denizens that need to be expelled.
A bank-owned property, by contrast, is a much cleaner and attractive deal. The REO property was unable to find a buyer during foreclosure auction. Now the bank owns it. The bank will see to 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.
In California, for example, banks are not required to give a Transfer Disclosure Statement,
a document that typically requires sellers to make known any defects of which they are informed.
By hiring Bill Lee & Associates, Inc. Realtors, you can rest assured knowing all parties are fulfilling Ohio state disclosure requirements.
Are REO properties a bargain in Dayton?
It's frequently presumed that any foreclosure must be a steal and a possibility for easy money. This isn't always true. You have to be prudent about buying a repossession if your intent is to make money. Even though the bank is typically eager to offload it promptly, they are also motivated to minimize any losses.
When pondering 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.
The bargains with money making potential exist, and many people do very well buying foreclosures. Still, there are also many REOs that are not good buys and may not be money makers.
All set 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 contract with 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 their knowledge concerning the condition of the property and what their process is for receiving offers. Since banks typically 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.
If, as a buyer, you can provide documentation demonstrating your ability to pay, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This goes for any real estate offer.)
After you've presented your offer, you can expect the bank to counter offer. At this point it will be your decision whether to accept their counter, or make another counter offer.
Your deal 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. Bill Lee & Associates, Inc. Realtors is accustomed to these situations and will work to ensure there are no unnecessary delays.