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Making an offer on REO property or a foreclosure in WOODSIDE?
Foreclosed upon and bank owned property purchases require the assistance of an experience professional. Should you have questions regarding real estate in WOODSIDE, New York,
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What's an REO?
"REO" is Real Estate Owned. These are houses which have completed the foreclosure process that the bank or mortgage company currently possesses. 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. And on top of all that, you'll get the property 100% as is. That possibly could consist of standing liens and even current tenants that need to be evicted.
A bank-owned property, by contrast, is a more tidy and attractive transaction. The REO property was unable to find a buyer during foreclosure auction. Now the bank owns it. The bank will attend to 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.
Do be aware 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 typically requires sellers to disclose any defects of which they are aware. By hiring One Stop Multiservice Inc, you can rest assured knowing all parties are fulfilling New York state disclosure requirements.
Am I guaranteed a bargain when investing in a bank owned property in WOODSIDE?
It is frequently assumed that any REO must be a good deal and a possibility for easy money. This often isn't true. You have to be prudent about buying a repossession if your intent is make money. While it's true that the bank is often anxious to offload it soon, they are also motivated to get as much as they can for it.
Look closely at the listing and sales prices of similar properties 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. There are bargains with potential to make money, and many people do very well flipping foreclosures. Still there are also many REOs that are not good buys and may lose money.
Time to make an offer?
Most mortgage companies have a department dedicated to REO that you'll work with while buying REO property from them. Normally 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 find out as much as you can about their knowledge about the condition of the property and what their process is for receiving 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 cancel the offer if you find it. As with making any offer on real estate, providing documentation showing your ability to secure financing may make your offer more attractive, such as a pre-approval letter from a lender.
After you've submitted your offer, you can expect the bank to counter offer. Then it will be your choice whether to accept their counter, or offer a counter to the counter offer. Understand, you'll be dealing with a process that usually involves multiple people at the bank, and they don't work evenings or weekends. It's quite common for there to be days or even weeks of negotiating back and forth.