Looking for REO property or a foreclosure in Piedmont Triad Area?
Just as with any home purchase, your wisest move is to hire a professional real estate agent. If you have questions regarding real estate in Piedmont Triad Area, North Carolina, call me or send me an e-mail.
What's an REO?
"REO" or Real Estate Owned are homes which have gone through foreclosure and are presently possessed by the bank or mortgage company. This is not the same as 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 accrued during the foreclosure process. The buyer must also be able to pay with cash in hand. Finally, you'll get the property entirely as is. That possibly could consist of existing liens and even current residents that need to be removed.
A bank-owned property, on the contrary, is a much neater and attractive transaction. The REO property didn't find a buyer during foreclosure auction. Now the lender owns it. The bank will handle 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.
You should be aware that REOs may be exempt from standard disclosure requirements. For instance, in California, banks do not have to give a Transfer Disclosure Statement, a document that typically requires sellers to disclose any defects of which they are knowledgeable. By hiring Realty Group of the Triad, you can rest assured knowing all parties are fulfilling North Carolina state disclosure requirements.
Is REO property in The Piedmont Triad Area a bargain?
It's occasionally presumed that any REO must be a good deal and a chance for easy money. This often isn't true. You have to be prudent about buying a REO if your intent is to make money. While it's true that the bank is usually anxious to sell it fast, they are also looking to minimize any losses.
When pondering what to pay for 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. Still, there are also many REOs that are not good buys and not likely to turn a profit.
All set to make an offer?
Most lenders have a department dedicated to REO that you'll work with in buying REO property from them. Usually 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 their knowledge about the condition of the property and what their process is for getting 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 unknown 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.
After you've made your offer, it's customary for the bank to respond with a counter offer. From there it will be your choice whether to accept their counter, or submit another counter offer. Your transaction could be settled in a single 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. Realty Group of the Triad is used to working around the schedules of this type of seller and will do everything possible to ensure there are no unnecessary delays.