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Interested in REO property or a foreclosure?
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Smart consumers will turn to a seasoned pro when considering a foreclosed property. Should you have any questions about real estate in New Jersey, call me or send me an e-mail. |
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What is an REO?"REO" or Real Estate Owned are homes which have been foreclosed upon and are currently held by the bank or mortgage company. This is not the same as 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 prepared to pay with cash in hand. To top everything off, you'll get the property 100% as is. That possibly may include current liens and even current occupants that may require eviction.
A bank-owned property, by contrast, is a much neater and attractive deal. 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 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 ordinarily requires sellers to reveal any defects of which they are informed. By hiring BestNJProperties.com, you can rest assured knowing all parties are fulfilling New Jersey state disclosure requirements.
Are REO properties a bargain?It's commonly assumed that any REO must be a bargain and a possibility for guaranteed profit. This simply isn't 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 often eager to sell it promptly, 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 remodeling necessary to prepare the house for resale or moving in. The bargains with money making potential exist, and many people do very well buying foreclosures. Still there are also many REOs that are not good buys and may lose money.
All set to make an offer?Most banks have a department dedicated to REO that you'll work with while buying REO property from them. Typically the REO department will use a listing agent to get their REO properties listed on the local MLS.
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 what they know regarding the condition of the property and what their process is for getting offers. Since banks typically sell REO properties "as is", it's often prudent 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 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 is generally true for any real estate offer.)
After you've made your offer, you can expect the bank to respond with a counter offer. From there it will be your decision whether to accept their counter, or offer a counter to the counter offer. Your transaction might 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.
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A. Dino Braz and BestNJProperties.com Serving You With Commercial, Investment and Residential Real Estate Information 24/7! We Also Offer Title Insurance, Mortgage Services, Credit Score Improvement, Loan Modification, Foreclosure Prevention, Short Sale and Mortgage Cancellation Services.
Simply email me at Dino@BestNJProperties.com or contact me by Cell 908-285-0263!
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