Purchasing REO property or a foreclosure in Tuckahoe?
What's an REO?
"REO" stands for Real Estate Owned. These are houses which have gone through foreclosure and are now owned by the bank or mortgage company. This is different than 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 added during the foreclosure process. The buyer must also be prepared to pay with cash in hand. Finally, you'll receive the property 100% as is. That possibly may include prevailing liens and even current residents that may require removal.
A bank-owned property, conversely, is a more tidy and attractive proposition. The REO property did not find a buyer during foreclosure auction. The lender now owns it. The bank will handle 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.
Note that REOs may be exempt from standard disclosure requirements. For example, in Nevada, it is optional for foreclosures to have a Property Disclosure Statement, a document that ordinarily requires sellers to disclose any defects of which they are aware. By hiring Village Realty, you can rest assured knowing all parties are fulfilling New York state disclosure requirements.
Am I assured a bargain when investing in an REO property in Tuckahoe?
It's occasionally believed that any REO must be a steal and a possibility for guaranteed profit. This isn't always the case. You have to be cautious about buying a repossession if your intent is to profit from the sale. While it's true that the bank is typically anxious to sell it promptly, they are also looking to minimize any losses.
When pondering what to pay for REO property, 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. The bargains with money making potential exist, and many people do very well buying and selling foreclosures. Still, there are also many REOs that are not good buys and may not be money makers.
All set to make an offer?
Most mortgage companies have staff dedicated to REO that you'll work with when buying REO property from them. Normally 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 learn as much as you can about what they know about the condition of the property and what their process is for accepting offers. Since banks usually sell REO properties "as is", it may be in your best interest to include an inspection contingency in your offer that gives you time to check for hidden damage and cancel the offer if you find it. As with making any offer on real estate, providing documentation of your ability to pay may make your offer more attractive, such as a pre-approval letter from a lender.
After you've submitted your offer, it's customary for the bank to counter offer. Then it will be your choice whether to accept their counter, or offer a counter to the counter offer. Realize, you'll be working with a process that generally 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 going back and forth. Village Realty is used to working around the schedules of this type of seller and will do everything possible to ensure there are no unnecessary delays.