Buying REO property or a foreclosure in Tecumseh?


	Savvy consumers will turn to a seasoned pro when considering the purchase of a foreclosed property.

What is an REO?

"REO" stands for Real Estate Owned. These are homes which have gone through foreclosure that the bank or mortgage company presently possesses. This is not the same as real estate up for foreclosure auction. Success, Realtors has experience to share with foreclosures and bank owned properties in Tecumseh, Michigan

Success, Realtors has experience to share with foreclosures and bank owned properties in Tecumseh, Michigan

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 ready to pay with cash in hand. And on top of all that, you'll accept the property entirely as is. That might consist of current liens and even current occupants that may require eviction.

A bank-owned property, on the contrary, is a much neater and attractive transaction. The REO property did not find a buyer during foreclosure auction. Now the lender owns it. The bank will deal with the removal of tax liens, evict occupants if needed and generally prepare for the issuance of a title insurance policy to the buyer at closing.

Take notice that REOs may be exempt from standard disclosure requirements. For example, in California, banks are not required to give a Transfer Disclosure Statement, a document that typically requires sellers to tell you about any defects they are informed of. By hiring Success, Realtors, you can rest assured knowing all parties are fulfilling Michigan state disclosure requirements.

Is REO property in Tecumseh a bargain?

It's frequently believed that any foreclosure must be a good buy and an opportunity for guaranteed profit. This isn't necessarily the case. You have to be cautious about buying a REO if your intent is to make money off of it. Even though the bank is often eager to offload it quickly, they are also looking to minimize any losses.

Success, Realtors has experience to share with foreclosures and bank owned properties in Tecumseh, Michigan

When considering what to pay for REO property, 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. It is possible to find REOs with money-making potential, and many people do very well buying and selling foreclosures. But there are also many REOs that are not good buys and may lose money.

Prepared to make an offer?

Most banks have staff dedicated to REO that you'll work with in buying REO property from them. Usually 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 their knowledge concerning the condition of the property and what their process is for taking offers. Since banks typically sell REO properties "as is", you may want to include an inspection contingency in your offer that gives you time to check for hidden damage and retract the offer if you find it. If, as a buyer, you can provide documentation showing your ability to pay, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This holds for any type of real estate offer.)

Once you've made your offer, it's customary for the bank to counter offer. From there it will be your choice whether to accept their counter, or make another counter offer. Your transaction could be final 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.