Looking for REO property or a foreclosure in Orange County?
Foreclosed upon and bank owned property purchases require the assistance of an experience professional.
What's an REO?
"REO" or Real Estate Owned are properties which have been through foreclosure that the bank or mortgage company presently owns. This is different than 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. The buyer must also be able to pay with cash in hand. To top everything off, you'll get the property totally as is. That could comprise of standing liens and even current denizens that need to be thrown 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 lender owns it. The lender 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.
Do be aware that REOs may be exempt from normal disclosure requirements. In California, for example, banks are exempt from giving a Transfer Disclosure Statement, a document that usually requires sellers to reveal any defects they are aware of. By hiring Lori Bitterman & Associates, you can rest assured knowing all parties are fulfilling California state disclosure requirements.
Is REO property in Orange County a bargain?
It's sometimes assumed that any REO must be a good buy and an opportunity for easy money. This isn't always true. You have to be very careful about buying a REO if your intent is make money. Even though the bank is typically anxious to sell it promptly, they are also looking to get as much as they can for it.
When pondering what to pay for REO property, 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. There are bargains with potential to make money, and many people do very well buying foreclosures. But there are also many REOs that are not good buys and may lose money.
Time to make an offer?
Most banks 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 discover 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 most commonly sell REO properties "as is", it's often prudent to include an inspection contingency in your offer that gives you time to check for unseen damage and retract the offer if you find it. If, as a buyer, you can provide documentation proving your ability to pay, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This is generally true for any type of 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 offer a counter to the counter offer. Realize, you'll be dealing with a process that usually involves several people at the bank, and they don't work evenings or weekends. It's not unusual for there to be days or even weeks of going back and forth. Lori Bitterman & Associates is accustomed to these situations and will work to ensure there are no unnecessary delays.
Lori Bitterman & Associates Your Single Source for Real Estate in So. Orange County (DRE #01262098) Mail to: 27101 Puerta Real, #150 Orange County, CA 92691
When pondering what to pay for REO property, 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. There are bargains with potential to make money, and many people do very well buying foreclosures. But there are also many REOs that are not good buys and may lose money.
