Interested in REO property or a foreclosure in La Jolla?
Foreclosed upon and bank owned property purchases require the assistance of an experience professional.
For more information, simply contact me through my site or e-mail me. I'm happy to address questions you have regarding real estate foreclosures.
What is an REO?
"REO" or Real Estate Owned are houses which have completed the foreclosure process and are presently owned by the bank or mortgage company. This is not the same as 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 prepared to pay with cash in hand. And on top of all that, you'll accept the property entirely as is. That might consist of existing liens and even current residents that need to be evicted.
A bank-owned property, by contrast, is a much cleaner and attractive proposition. The REO property was unable to find a buyer during foreclosure auction. The bank now owns it. The bank will attend 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.
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 usually requires sellers to disclose any defects they are aware of.
By hiring Neely, Barrow & Associates, you can rest assured knowing all parties are fulfilling California state disclosure requirements.
Am I guaranteed a low price when investing in an REO property in La Jolla?
It's frequently believed that any foreclosure must be a steal and a chance for guaranteed profit. This frequently isn't true. You have to be very careful about buying a REO if your intent is to make money off of it. While it's true that the bank is typically anxious to sell it soon, they are also motivated to minimize any losses.
Look carefully at the listing and sales prices of comparable homes in the neighborhood when considering the purchase of 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 buying and selling foreclosures. But there are also many REOs that are not good buys and may not be money makers.
All set to make an offer?
Most lenders have staff dedicated to REO that you'll work with in buying REO property from them. Typically the REO department will use a listing agent to get their REO properties listed on the local MLS.
Prior to making your offer, you'll want to contact either the listing agent or REO department at the bank and discover as much as you can about what they know concerning the condition of the property and what their process is for accepting offers. Since banks most commonly 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.
As with making any offer on real estate, providing documentation of your ability to secure financing may make your offer more attractive, such as a pre-approval letter from a lender.
Once you've made your offer, you can expect the bank to respond with a counter offer. Then it will be your choice whether to accept their counter, or make another counter offer.
Understand, you'll be working with a process that usually involves a group of 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. Neely, Barrow & Associates is accustomed to these situations and will work to ensure there are no unnecessary delays.
Richard Neely Jr. | DRE# 01264175 | (ph) 619.750.1107 | (fax) 619.297.5368 Michael Barrow | DRE# 01419213 | (ph) 619.772.1574 | (fax) 619.255.1675 Grand Pacific Properties Group P.O. Box 2266, La Jolla, California 92038
Look carefully at the listing and sales prices of comparable homes in the neighborhood when considering the purchase of 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 buying and selling foreclosures. But there are also many REOs that are not good buys and may not be money makers.
