Interested in REO property or a foreclosure in Downers Grove?
Just as with any home purchase, your wisest move is to hire a professional real estate agent.
For more information, simply contact me through my site or e-mail me. I'm happy to answer any questions you have about real estate foreclosures.
What is an REO?
"REO" or Real Estate Owned are homes which have been through foreclosure and are currently possessed 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 100% as is. That might comprise of current liens and even current residents that need to be thrown out.
A bank-owned property, on the other hand, is a much cleaner and attractive option. The REO property did not find a buyer during foreclosure auction. The lender now owns it. The bank will attend to the elimination of tax liens, evict occupants if needed and generally prepare for the issuance of a title insurance policy to the buyer at closing.
Take notice 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 ordinarily requires sellers to reveal any defects they are knowledgeable of.
By hiring Milestone Realtors, you can rest assured knowing all parties are fulfilling Illinois state disclosure requirements.
Are REO properties a bargain in Dupage County?
It's occasionally thought that any foreclosure must be a bargain and an opportunity for guaranteed profit. This isn't necessarily true. You have to be very careful about buying a REO if your intent is to make money off of it. Even though the bank is typically eager to offload it promptly, they are also looking to minimize any losses.
When contemplating the value of REO property, 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 and selling foreclosures. Still there are also many REOs that are not good buys and may not be money makers.
Time to make an offer?
Most mortgage companies have staff 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 hire a listing agent.
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 what they know about the condition of the property and what their process is for accepting offers. Since banks almost always sell REO properties "as is", you may want to include an inspection contingency in your offer that gives you time to check for hidden damage and cancel 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 real estate offer.)
Once you've made your offer, it's customary for the bank to counter offer. At this point it will be your choice whether to accept their counter, or make another counter offer.
Realize, you'll be working with a process that usually involves multiple people at the bank, and they don't work evenings or weekends. It's typical for the process of offers and counter offers to take days or even weeks. Milestone Realtors 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.
When contemplating the value of REO property, 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 and selling foreclosures. Still there are also many REOs that are not good buys and may not be money makers.
