Interested in REO property or a foreclosure in Rockport?
Savvy consumers will turn to a seasoned pro when considering the purchase of a foreclosed property.
For more information, simply contact me through my site or e-mail me. I'm glad to address any questions you have regarding real estate foreclosures.
What is an REO?
"REO" or Real Estate Owned are properties which have been through foreclosure and are currently owned 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 amassed during the foreclosure process. You must also be prepared to pay with cash in hand. And on top of all that, you'll get the property entirely as is. That may include prevailing liens and even current occupants that may require expulsion.
A bank-owned property, on the contrary, is a more tidy and attractive transaction. The REO property did not 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 arrange 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 California, banks are not required to give a Transfer Disclosure Statement,
a document that ordinarily requires sellers to reveal any defects of which they are knowledgeable.
By hiring Beaton Real Estate, you can rest assured knowing all parties are fulfilling Massachusetts state disclosure requirements.
Is REO property in Rockport a bargain?
It's commonly assumed that any REO must be a good deal and an opportunity for guaranteed profit. This isn't always true. You have to be prudent about buying a REO if your intent is profit from the sale. While it's true that the bank is usually eager to sell it quickly, they are also looking to minimize any losses.
Look closely at the listing and sales prices of comparable properties in the neighborhood when making an offer on an REO. And factor in any repairs or upgrades 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 flipping foreclosures. Still there are also many REOs that are not good buys and may not be money makers.
Prepared to make an offer?
Most banks have staff 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 hire a listing agent.
Prior to 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 accepting offers. Since banks usually sell REO properties "as is", you may want to include an inspection contingency in your offer that gives you time to check for unseen damage and withdraw the offer if you find it.
If, as a buyer, you can provide documentation showing your ability to secure financing, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This holds for any real estate offer.)
After you've made your offer, you can expect the bank to make a counter offer. From there it will be your decision whether to accept their counter, or submit another counter offer.
Be aware, you'll be working with a process that generally 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. Beaton Real Estate is accustomed to these situations and will work to ensure there are no unnecessary delays.
Look closely at the listing and sales prices of comparable properties in the neighborhood when making an offer on an REO. And factor in any repairs or upgrades 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 flipping foreclosures. Still there are also many REOs that are not good buys and may not be money makers.
