Interested in REO property or a foreclosure in Broomfield?
|Foreclosed upon and bank owned property purchases require the assistance of an experience professional.|
What is an REO?"REO" means Real Estate Owned. These are houses which have completed the foreclosure process that the bank or mortgage company now owns. This is unlike 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. You must also be willing to pay with cash in hand. To top everything off, you'll get the property totally as is. That might comprise of existing liens and even current occupants that need to be expelled.
A bank-owned property, on the contrary, is a much neater and attractive proposition. The REO property did not find a buyer during foreclosure auction. The lender now owns it. The bank will take care of 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 typically requires sellers to reveal any defects of which they are knowledgeable. By hiring Metro Brokers Home Delivery, LLC (Paul H. Deakin - Owner/Broker), you can rest assured knowing all parties are fulfilling Colorado state disclosure requirements.
Am I guaranteed a low price when buying an REO property in Broomfield?It is commonly believed that any foreclosure must be a steal and a chance for easy money. This isn't necessarily true. You have to be very careful about buying a REO if your intent is 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 considering 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. There are bargains with potential to make money, and many people do very well flipping foreclosures. Still there are also many REOs that are not good buys and not likely to turn a profit.
Prepared to make an offer?Most lenders have staff dedicated to REO that you'll work with while buying REO property from them. To get their properties advertised on the local MLS, the lender will typically hire 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 what they know 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 cancel the offer if you find it. As with making any offer on real estate, providing documentation proving your ability to secure financing may make your offer more attractive, such as a pre-approval letter from a lender.
After you've presented your offer, it's customary for the bank to make a counter offer. At this point it will be up to you to decide whether to accept their counter, or offer a counter to the counter offer. Be aware, you'll be working with a process that probably involves multiple people at the bank, and they don't work evenings or weekends. It's typical for there to be days or even weeks of negotiating back and forth.