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Interested in REO property or a foreclosure in Chapin?
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Smart consumers will turn to a seasoned pro when considering a foreclosed property.
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What's an REO?
"REO" or Real Estate Owned are homes which have been through foreclosure that the bank or mortgage company now holds. 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 amassed during the foreclosure process. The buyer must also be ready to pay with cash in hand. Finally, you'll accept the property totally as is. That may involve existing liens and even current denizens that need to be expelled.
A bank-owned property, on the other hand, is a more tidy and attractive proposition. The REO property was unable to find a buyer during foreclosure auction. Now the bank owns it. The lender will deal with 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.
Take notice that REOs may be exempt from typical disclosure requirements.
For instance, in California, banks are not required to give a Transfer Disclosure Statement,
a document that normally requires sellers to make known any defects they are aware of.
By hiring Exit Real Estate Consultants Realty, you can rest assured knowing all parties are fulfilling South Carolina state disclosure requirements.
Are REO properties a bargain in Lexington County?
It's sometimes thought that any foreclosure must be a steal and a chance for guaranteed profit. This often isn't true. You have to be cautious about buying a REO if your intent is make a profit. Even though the bank is usually anxious to offload it quickly, they are also motivated to minimize any losses.
When contemplating the value of a foreclosure, carefully analyze 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 flipping foreclosures. However there are also many REOs that are not good buys and may lose money.
All set to make an offer?
Most banks have staff 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 frequently use a listing agent.
Before making your offer, you'll want to contact either the listing agent or REO department at the bank and find out as much as you can about their knowledge about the condition of the property and what their process is for taking offers. Since banks typically 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 retract 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 submitted your offer, it's customary for the bank to make a counter offer. Then it will be up to you to decide whether to accept their counter, or submit another counter offer.
Your deal could be final in one 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. Exit Real Estate Consultants Realty is accustomed to these situations and will work to ensure there are no undue delays.
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