Buying REO property or a foreclosure in St Petersburg?
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 answer any questions you have regarding real estate foreclosures.
What is an REO?
"REO" means Real Estate Owned. These are properties which have completed the foreclosure process and are presently held by the bank or mortgage company. This is unlike a property 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. You must also be able to pay with cash in hand. Finally, you'll get the property completely as is. That may involve standing liens and even current tenants that need to be evicted.
A bank-owned property, on the other hand, is a much cleaner and attractive deal. The REO property was unable to find a buyer during foreclosure auction. Now the lender owns it. The lender will deal with 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 standard disclosure requirements.
For example, in Nevada, it is optional for foreclosures to have a Property Disclosure Statement,
a document that normally requires sellers to reveal any defects they are knowledgeable of.
By hiring Royal Highlander Real Estate Consultants, LLC, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Am I guaranteed a bargain when investing in an REO property in St Petersburg?
It is frequently believed that any foreclosure must be a bargain and a chance for guaranteed profit. This often isn't true. You have to be cautious about buying a repossession if your intent is to make money off of it. Even though the bank is typically anxious to offload it fast, they are also looking to get as much as they can for it.
Look carefully at the listing and sales prices of comparable properties 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. Still, there are also many REOs that are not good buys and may not be money makers.
Time to make an offer?
Most banks have staff dedicated to REO that you'll work with when 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 learn as much as you can about what they know regarding the condition of the property and what their process is for receiving offers. Since banks typically sell REO properties "as is", it's often prudent to 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 made your offer, you can expect the bank to counter offer. At this point it will be up to you to decide whether to accept their counter, or make another counter offer.
Realize, you'll be dealing with a process that generally involves a group of 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. Royal Highlander Real Estate Consultants, LLC is used to working around the schedules of this type of seller and will do everything possible to ensure there are no unnecessary delays.