Making an offer on REO property or a foreclosure in Ashtabula?
Just as with any property purchase, your wisest move is to hire a professional real estate agent.
What's an REO?
"REO" means Real Estate Owned. These are houses which have been foreclosed upon that the bank or mortgage company now holds. This differs from a property 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 accrued during the foreclosure process. The buyer must also be ready to pay with cash in hand. And on top of all that, you'll get the property entirely as is. That possibly will comprise of standing liens and even current denizens that need to be removed.
A bank-owned property, by contrast, is a much cleaner and attractive deal. The REO property did not find a buyer during foreclosure auction. Now the bank owns it. The bank will handle the removal of tax liens, evict occupants if needed and generally organize for the issuance of a title insurance policy to the buyer at closing.
Take notice 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 make known any defects of which they are knowledgeable. By hiring Prudential Select Properties, you can rest assured knowing all parties are fulfilling Ohio state disclosure requirements.
Are REO properties a bargain in Ashtabula County?
It's sometimes assumed that any REO must be a steal and an opportunity for guaranteed profit. This frequently isn't true. You have to be prudent about buying a REO if your intent is make a profit. While it's true that the bank is usually anxious to offload it quickly, they are also motivated to minimize any losses.
When contemplating what to pay for 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. The bargains with money making potential exist, and many people do very well buying foreclosures. However there are also many REOs that are not good buys and may lose money.
Prepared to make an offer?
Most lenders have a department dedicated to REO that you'll work with while buying REO property from them. Commonly 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 find out as much as you can about what they know about the condition of the property and what their process is for getting 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 hidden damage and retract 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 holds for any type of real estate offer.)
After you've made your offer, it's customary for the bank to respond with a counter offer. From there it will be your decision whether to accept their counter, or make another counter offer. Your deal might be settled in a single day, but that's rare. Since offers and counter offers usually give the other party a day or longer to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer. Prudential Select Properties is accustomed to these situations and will work to ensure there are no unnecessary delays.
Prudential Select Properties 1634 East Prospect Ashtabula, OH 44004
When contemplating what to pay for 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. The bargains with money making potential exist, and many people do very well buying foreclosures. However there are also many REOs that are not good buys and may lose money.
