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Interested in REO property or a foreclosure in Beaufort?
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Just as with any home purchase, your wisest move is to hire a professional real estate agent.
For more information, just contact me through my site or e-mail me. I'm glad to address any questions you have about real estate foreclosures.
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What's an REO?
"REO" is an abbreviation for Real Estate Owned. These are properties which have been foreclosed upon and are presently possessed 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 able to pay with cash in hand. And on top of all that, you'll accept the property completely as is. That possibly will include existing liens and even current occupants that need to be evicted.
A bank-owned property, conversely, is a more tidy and attractive option. The REO property was unable to find a buyer during foreclosure auction. The bank now owns it. The lender will handle 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 normal disclosure requirements.
For example, in North Carolina, it is optional for foreclosures to have a Property Disclosure Statement,
a document that ordinarily requires sellers to tell you about any defects they are aware of.
By hiring Exit Realty of Beaufort, you can rest assured knowing all parties are fulfilling South Carolina state disclosure requirements.
Is REO property in Beaufort a bargain?
It's frequently thought that any foreclosure must be a steal and a possibility for easy money. This often isn't true. You have to be very careful about buying a REO if your intent is profit from the sale. While it's true that the bank is often eager to offload it promptly, they are also looking to minimize any losses.
Look closely at the listing and sales prices of competing homes in the neighborhood when making an offer on an REO. And factor in any repairs or upgrades necessary to prepare the house for resale or moving in.
There are bargains with potential to make money, and many people do very well buying foreclosures. Still there are also many REOs that are not good buys and not likely to turn a profit.
Time to make an offer?
Most lenders have staff dedicated to REO that you'll work with while buying REO property from them. To get their properties advertised on the local MLS, the lender will usually contract with a listing agent.
Before 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 their knowledge regarding the condition of the property and what their process is for accepting offers. Since banks typically 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 terminate the offer if you find it.
If, as a buyer, you can provide documentation showing 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.)
Once you've presented your offer, you can expect the bank to make a counter offer. At this point it will be up to you to decide whether to accept their counter, or offer a counter to the counter offer.
Your transaction might 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.
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