Interested in REO property or a foreclosure in Martinsville?
Savvy consumers will turn to a seasoned pro when considering the purchase of a foreclosed property.
What's an REO?
"REO" is Real Estate Owned. These are properties which have been foreclosed upon and are currently possessed by the bank or mortgage company. This is not the same as 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 accumulated during the foreclosure process. You must also be prepared to pay with cash in hand. To top everything off, you'll get the property entirely as is. That possibly could involve existing liens and even current tenants that need to be put out.
A bank-owned property, on the other hand, is a more tidy and attractive proposition. The REO property was unable to find a buyer during foreclosure auction. The bank now owns it. The bank will deal with 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.
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 usually requires sellers to reveal any defects of which they are knowledgeable.
By hiring Southern Virginia Properties, you can rest assured knowing all parties are fulfilling Virginia state disclosure requirements.
Is REO property in Martinsville a bargain?
It is frequently assumed that any foreclosure must be a good deal and an opportunity for easy money. This isn't always the case. You have to be cautious about buying a repossession if your intent is to profit from the sale. Even though the bank is usually anxious to sell it fast, they are also motivated to minimize any losses.
Look carefully at the listing and sales prices of comparable properties in the neighborhood when considering the purchase of an REO. And factor in any repairs or remodeling necessary to prepare the house for resale or moving in.
The bargains with money making potential exist, and many people do very well flipping foreclosures. Still, there are also many REOs that are not good buys and may lose money.
Prepared to make an offer?
Most mortgage companies have a department dedicated to REO that you'll work with when buying REO property from them. Typically the REO department will use a listing agent to get their REO properties listed on the local MLS.
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 regarding the condition of the property and what their process is for taking offers. Since banks most commonly sell REO properties "as is", it's often prudent to include an inspection contingency in your offer that gives you time to check for unseen damage and retract the offer if you find it.
If, as a buyer, you can provide documentation proving your ability to pay, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This goes for any real estate offer.)
Once you've made your offer, it's customary for 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.
Your transaction might be settled in a single day, but that's usually not the case. 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. Southern Virginia Properties is used to working around the schedules of this type of seller and will do everything possible to ensure there are no unnecessary delays.