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Purchasing REO property or a foreclosure in Tampa?
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Smart consumers will turn to a seasoned pro when considering the purchase of a foreclosed property.
For more information, simply contact me through my site or e-mail me. I'm happy to address questions you have about real estate foreclosures.
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What is an REO?
"REO" or Real Estate Owned are properties which have been through foreclosure and are now owned by the bank or mortgage company. 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 accrued during the foreclosure process. You must also be ready to pay with cash in hand. And on top of all that, you'll receive the property entirely as is. That may comprise of prevailing liens and even current tenants that may require expulsion.
A bank-owned property, on the other hand, is a more tidy and attractive proposition. The REO property did not 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 arrange for the issuance of a title insurance policy to the buyer at closing.
You should be aware that REOs may be exempt from standard disclosure requirements.
For instance, in California, banks do not have to give a Transfer Disclosure Statement,
a document that normally requires sellers to tell you about any defects they are informed of.
By hiring The Ward Team 813-319-6236, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Are REO properties a bargain in Tampa?
It's occasionally thought that any REO must be a bargain and a chance for easy money. This often isn't true. You have to be prudent about buying a repossession if your intent is make a profit. Even though the bank is usually eager to sell it quickly, they are also looking to minimize any losses.
When considering the value of 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.
It is possible to find REOs with money-making potential, and many people do very well flipping foreclosures. But there are also many REOs that are not good buys and may lose money.
Ready to make an offer?
Most banks have staff dedicated to REO that you'll work with while buying REO property from them. Usually 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 find out as much as you can about what they know concerning the condition of the property and what their process is for taking offers. Since banks almost always 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 cancel the offer if you find it.
As with making any offer on real estate, providing documentation showing your ability to pay may make your offer more attractive, such as a pre-approval letter from a lender.
After you've made your offer, you can expect the bank to respond with a counter offer. At this point it will be up to you to decide whether to accept their counter, or make another counter offer.
Understand, you'll be contending with a process that probably involves multiple 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 negotiating back and forth. The Ward Team 813-319-6236 is are used to working around the schedules of this type of seller and will do everything possible to ensure there are no undue delays.
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