Foreclosed upon and bank owned property purchases require the assistance of an experience professional.
If you have any questions regarding real estate in Reston, Virginia, call me or send me an e-mail.
What is an REO?
"REO" means Real Estate Owned. These are homes which have been foreclosed upon and are currently owned by the bank or mortgage company. This is not the same as 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 amassed during the foreclosure process. The buyer must also be ready to pay with cash in hand. And on top of all that, you'll receive the property 100% as is. That possibly may include current liens and even current occupants that need to be expelled.
A bank-owned property, on the contrary, is a much cleaner and attractive proposition. The REO property was unable to find a buyer during foreclosure auction. The lender now owns it. The lender will attend to 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 typical disclosure requirements.
For example, in Texas, it is optional for foreclosures to have a Property Disclosure Statement,
a document that typically requires sellers to disclose any defects they are aware of.
By hiring Angela Mitchell Sells Northern Virginia, you can rest assured knowing all parties are fulfilling Virginia state disclosure requirements.
Is REO property in Reston a bargain?
It's sometimes thought that any REO must be a bargain and a possibility for guaranteed profit. This isn't always true. You have to be very careful about buying a repossession if your intent is profit from the sale. Even though the bank is usually eager to sell it soon, they are also looking to get as much as they can for it.
When contemplating the value of a foreclosure, carefully analyze 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.
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 not be money makers.
Ready to make an offer?
Most mortgage companies have staff dedicated to REO that you'll work with in buying REO property from them. To get their properties advertised on the local MLS, the lender will typically use a listing agent.
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 their knowledge about the condition of the property and what their process is for taking 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 terminate 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.
Once you've presented your offer, it's customary for the bank to counter offer. From there it will be your decision whether to accept their counter, or make another counter offer.
Understand, you'll be dealing with a process that generally involves several people at the bank, and they don't work evenings or weekends. It's not uncommon for there to be days or even weeks of going back and forth. Angela Mitchell Sells Northern Virginia is are used to working around the schedules of this type of seller and will do everything possible to ensure there are no undue delays.
When contemplating the value of a foreclosure, carefully analyze 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.
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 not be money makers.
