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Making an offer on REO property or a foreclosure in Fall River?
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Foreclosed upon and bank owned property purchases require the assistance of an experience professional.
Should you have any questions about real estate in Fall River, Massachusetts, 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 gone through foreclosure and are currently held by the bank or mortgage company. This is different than real estate 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. The buyer must also be willing to pay with cash in hand. Finally, you'll accept the property 100% as is. That possibly could consist of standing liens and even current denizens that may require removal.
A bank-owned property, on the other hand, is a much cleaner and attractive option. The REO property didn't find a buyer during foreclosure auction. The bank now owns it. The bank will handle the elimination of tax liens, evict occupants if needed and generally arrange for the issuance of a title insurance policy to the buyer at closing.
Note that REOs may be exempt from normal disclosure requirements.
For example, in Texas, it is optional for foreclosures to have a Property Disclosure Statement,
a document that usually requires sellers to disclose any defects of which they are informed.
By hiring EZ Home Search Real Estate, you can rest assured knowing all parties are fulfilling Massachusetts state disclosure requirements.
Am I assured a bargain when purchasing a bank owned property in Fall River?
It's sometimes presumed that any REO must be a steal and an opportunity for easy money. This frequently isn't true. You have to be very careful about buying a REO if your intent is to make a profit. While it's true that the bank is typically anxious to offload it soon, they are also motivated to minimize any losses.
When pondering the value of 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.
It is possible to find REOs with money-making potential, and many people do very well buying foreclosures. Still, there are also many REOs that are not good buys and may lose money.
Prepared to make an offer?
Most mortgage companies have a department 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 about the condition of the property and what their process is for taking offers. Since banks typically sell REO properties "as is", you'll want to be sure and include an inspection contingency in your offer that gives you time to check for hidden damage and terminate 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 presented your offer, you can expect the bank to counter offer. From there it will be your choice whether to accept their counter, or offer a counter to the counter offer.
Your transaction could be settled 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. EZ Home Search Real Estate is accustomed to these situations and will work to ensure there are no unnecessary delays.
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EZHS Agents
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