Purchasing REO property or a foreclosure in Jacksonville?
Savvy consumers will turn to a seasoned pro when considering a foreclosed property.
What is an REO?
"REO" or Real Estate Owned are homes which have completed the foreclosure process and are presently possessed by the bank or mortgage company. This differs from 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 accumulated during the foreclosure process. You must also be able to pay with cash in hand. To top everything off, you'll receive the property entirely as is. That might comprise of existing liens and even current denizens that need to be put out.
A bank-owned property, on the contrary, is a much cleaner and attractive transaction. The REO property was unable to find a buyer during foreclosure auction. Now the lender owns it. The bank will see to 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 typical disclosure requirements.
For example, in Texas, it is optional for foreclosures to have a Property Disclosure Statement,
a document that normally requires sellers to tell you about any defects they are aware of.
By hiring Personal Service Realty, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Are REO properties a bargain in Duval County?
It's commonly assumed that any foreclosure must be a steal and an opportunity for easy money. This often isn't true. You have to be very careful about buying a repossession if your intent is make a profit. While it's true that the bank is often eager to offload it fast, they are also motivated to get as much as they can for it.
Look closely at the listing and sales prices of similar homes in the neighborhood when making an offer on an REO. And factor in any repairs or remodeling necessary to prepare the house for resale or moving in.
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.
Prepared to make an offer?
Most lenders have a department dedicated to REO that you'll work with when buying REO property from them. To get their properties advertised on the local MLS, the lender will often hire a listing agent.
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 regarding the condition of the property and what their process is for accepting offers. Since banks almost always sell REO properties "as is", it may be in your best interest 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 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 type of real estate offer.)
After you've submitted your offer, you can expect the bank to make a counter offer. Then it will be your choice whether to accept their counter, or submit another counter offer.
Be aware, you'll be dealing with a process that usually involves multiple 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 negotiating back and forth.
Personal Service Realty 4083 Sunbeam Rd Apt 1701 Jacksonville, FL 32257-7518
Look closely at the listing and sales prices of similar homes in the neighborhood when making an offer on an REO. And factor in any repairs or remodeling necessary to prepare the house for resale or moving in.
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.
