Looking for REO property or a foreclosure in West Lake Hills?
Just as with any home purchase, your smartest move is to hire a professional real estate agent.
What is an REO?
"REO" is an abbreviation for Real Estate Owned. These are homes which have completed the foreclosure process that the bank or mortgage company now possesses. 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 amassed 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 completely as is. That might comprise of standing liens and even current tenants that need to be removed.
A bank-owned property, on the contrary, 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 bank will handle 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.
Note 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 they are knowledgeable of.
By hiring Anne Johnson, you can rest assured knowing all parties are fulfilling Texas state disclosure requirements.
Is REO property in West Lake Hills a bargain?
It is frequently thought that any REO must be a steal and an opportunity for guaranteed profit. This isn't always true. You have to be cautious about buying a repossession if your intent is to make money off of it. Even though the bank is often eager to sell it soon, they are also looking to minimize any losses.
When contemplating the value of REO property, you need to look closely at 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 flipping foreclosures. Still, there are also many REOs that are not good buys and may not be money makers.
All set to make an offer?
Most mortgage companies have a department 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 contract with a listing agent.
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 what they know regarding the condition of the property and what their process is for getting 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 unknown damage and terminate the offer if you find it.
As with making any offer on real estate, providing documentation of your ability to pay may make your offer more attractive, such as a pre-approval letter from a lender.
Once you've submitted your offer, you can expect the bank to respond with a counter offer. At this point it will be your decision whether to accept their counter, or make another counter offer.
Realize, you'll be contending with a process that generally involves a group of 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. Anne Johnson is used to working around the schedules of this type of seller and will do everything possible to ensure there are no undue delays.