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Looking for REO property or a foreclosure in Orlando?
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Smart consumers will turn to a seasoned pro when considering the purchase of a foreclosed property.
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What is an REO?
"REO" is an abbreviation for Real Estate Owned. These are properties which have completed the foreclosure process and are now possessed by the bank or mortgage company. This is unlike 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 added during the foreclosure process. You must also be willing to pay with cash in hand. To top everything off, you'll accept the property completely as is. That could involve existing liens and even current tenants that may require removal.
A bank-owned property, conversely, is a more tidy and attractive transaction. The REO property didn't find a buyer during foreclosure auction. Now the lender owns it. The bank will attend to the removal of tax liens, evict occupants if needed and generally plan 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 example, in Nevada, it is optional for foreclosures to have a Property Disclosure Statement,
a document that typically requires sellers to disclose any defects of which they are knowledgeable.
By hiring Wendy Carugno & Kathy Puschmann, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Is REO property in Orlando a bargain?
It's commonly believed that any foreclosure must be a bargain and a possibility for guaranteed profit. This isn't always true. You have to be cautious about buying a REO if your intent is make money. Even though the bank is usually eager to sell it soon, they are also looking to minimize any losses.
When pondering what to pay for 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 buying and selling foreclosures. Still there are also many REOs that are not good buys and may lose money.
All set to make an offer?
Most mortgage companies 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 frequently use a listing agent.
Prior to 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 concerning the condition of the property and what their process is for taking 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 unknown damage and withdraw the offer if you find it.
If, as a buyer, you can provide documentation demonstrating your ability to pay, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This goes for any type of real estate offer.)
Once you've made 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 transaction might be final in one day, but that's rare. Since offers and counter offers usually allow a day or more for the other party to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer. Wendy Carugno & Kathy Puschmann is are used to working around the schedules of this type of seller and will do everything possible to ensure there are no undue delays.
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