Buying REO property or a foreclosure in Ft. Lauderdale?
Foreclosed upon and bank owned property purchases require the assistance of an experience professional.
Should you have any questions regarding real estate in Ft. Lauderdale, Florida, call me or send me an e-mail.
What's an REO?
"REO" or Real Estate Owned are homes which have completed the foreclosure process that the bank or mortgage company currently holds. This is unlike real estate 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. To top everything off, you'll accept the property completely as is. That may include existing liens and even current denizens that may require removal.
A bank-owned property, by contrast, is a much cleaner and attractive deal. The REO property was unable to find a buyer during foreclosure auction. Now the bank owns it. The lender will handle the elimination of tax liens, evict occupants if needed and generally prepare for the issuance of a title insurance policy to the buyer at closing.
Note that REOs may be exempt from normal disclosure requirements.
In California, for example, banks are not required to give a Transfer Disclosure Statement,
a document that ordinarily requires sellers to make known any defects they are knowledgeable of.
By hiring Charles Rutenberg Realty LLC, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Are REO properties a bargain in Ft. Lauderdale?
It's commonly assumed that any REO must be a bargain and a possibility for easy money. This frequently isn't true. You have to be cautious about buying a repossession if your intent is make a profit. Even though the bank is usually anxious to sell it soon, they are also looking to get as much as they can for it.
When contemplating 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.
The bargains with money making potential exist, and many people do very well flipping foreclosures. But there are also many REOs that are not good buys and not likely to turn a profit.
Time to make an offer?
Most banks have staff dedicated to REO that you'll work with when buying REO property from them. To get their properties advertised on the local MLS, the lender will frequently use a listing agent.
Before 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 concerning the condition of the property and what their process is for accepting 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 terminate the offer if you find it.
If, as a buyer, you can provide documentation proving 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 type of real estate offer.)
After you've presented your offer, it's customary for the bank to make a counter offer. Then it will be up to you to decide whether to accept their counter, or make another counter offer.
Realize, you'll be dealing with a process that usually involves several people at the bank, and they don't work evenings or weekends. It's quite common for the process of offers and counter offers to take days or even weeks.
Charles Rutenberg Realty LLC 2201 Prospect Road Suite 200 Ft. Lauderdale, FL 33301
When contemplating 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.
The bargains with money making potential exist, and many people do very well flipping foreclosures. But there are also many REOs that are not good buys and not likely to turn a profit.
