Interested in REO property or a foreclosure in Murphy?
Making an offer on a bank-owned property is not something to be taken lightly. If you have any questions about real estate in Murphy, North Carolina, call me or send me an e-mail.
What's an REO?
"REO" is short for Real Estate Owned. These are homes which have completed the foreclosure process and are now possessed by the bank or mortgage company. This is not the same as 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 added during the foreclosure process. You must also be ready to pay with cash in hand. To top everything off, you'll accept the property entirely as is. That might involve prevailing liens and even current residents that need to be expelled.
A bank-owned property, on the other hand, is a much cleaner and attractive option. The REO property was unable to find a buyer during foreclosure auction. Now the lender owns it. The lender 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.
Note that REOs may be exempt from normal disclosure requirements. For example, in Texas, it is optional for foreclosures to have a Property Disclosure Statement, a document that normally requires sellers to disclose any defects they are knowledgeable of. By hiring ColdWell Banker High Country Realty, you can rest assured knowing all parties are fulfilling North Carolina state disclosure requirements.
Am I guaranteed a good deal when purchasing a bank owned property in Murphy?
It's sometimes thought that any foreclosure must be a steal and an opportunity for guaranteed profit. This simply isn't true. You have to be very careful about buying a REO if your intent is profit from the sale. Even though the bank is usually anxious to offload it quickly, they are also looking to minimize any losses.
When pondering what to pay for a foreclosure, 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. There are bargains with potential to make money, and many people do very well buying and selling foreclosures. However 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 while buying REO property from them. Normally 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 learn 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", it may be in your best interest to include an inspection contingency in your offer that gives you time to check for unseen damage and withdraw the offer if you find it. If, as a buyer, you can provide documentation demonstrating 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 real estate offer.)
After you've presented your offer, it's customary for the bank to make a counter offer. At this point it will be your choice whether to accept their counter, or submit another counter offer. Understand, you'll be contending with a process that usually involves a group of people at the bank, and they don't work evenings or weekends. It's not unusual for there to be days or even weeks of going back and forth.
* MOL = More or Less
ColdWell Banker High Country Realty 4290 US Highway 64 West Murphy, NC 28906
When pondering what to pay for a foreclosure, 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. There are bargains with potential to make money, and many people do very well buying and selling foreclosures. However there are also many REOs that are not good buys and may not be money makers.
