Want to Purchase Foreclosure Property

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Want to Purchase Foreclosure Property?

As REO Realtors, we have access to 1000's of homes that are bank owned or for sale as a short sale ... foreclosure property can be excellent investment property, a great deal for first-time home buyers, anyone can get in on these great deals!

What is an REO?
REO is “Real Estate Owned.” These properties have gone through foreclosure and are now owned by the bank, mortgage company, or lender. An REO property is a cleaner more attractive transaction than purchasing a property that’s on foreclosure auction at the courthouse. The REO property did not find a buyer during foreclosure auction. The lender now owns it. When purchasing a property during a foreclosure auction, the purchase pays the loan balance plus interest and other accumulated fees the lender incurred during the foreclosure process. You must be prepare to pay with cash in hand. Also, you will receive this property “as is” without the benefit of inspection, there may be existing liens (such as mechanics, tax, etc.) and even occupants that need to be evicted. When purchasing an REO property, the lender will see to the removal of liens, evict occupants, if needed, and generally prepare for the issuance of a title insurance policy to the buyer at closing. Do be aware that REO’s may be exempt from normal disclosure requirements. Virginia is a "buyer beware" state and there are no requirements to disclose any deficiencies or problems with the property; it's up to the buyer to locate the problem.

Are REO’s a good deal?
It’s generally assumed that all REO are a bargain and an opportunity for easy money. This isn’t necessarily true. It’s imperative that you investigate everything you can about the property if your intent is to make money off of it. The bank is typically anxious to sell it quickly, but remember they are also very motivated to get as much as they can for it. When considering the value of an REO property, look closely at comparable sales in the neighborhood. 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 foreclosures. But there are also many REO’s that are not good buys and not likely to turn a profit.

If you’re looking to purchase an REO property for your personal residence, make sure your Realtor knows about working with REO properties. You want to make sure to make your offer contingent on a home inspection. Granted the REO is being sold “as is,” but you want to be able to inspect the property for any latent problems and if there are any major problems, you can rescind your offer.

Ready to purchase an REO property?
Most lender have an REO department or an asset management company that you’ll work with in conjunction with the Realtor who listed the property when purchasing an REO property. Most REO departments or asset management companies will use a listing agent to get their REO properties listed on the local MLS, market the property, oversee the property maintenance. Before making an 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 about the condition of the property and what their process is for receiving offers. When making an offer, you’ll want to make your offer more attractive by including a pre-approval letter from a lender. After you’ve made your offer, you can expect the bank to make a counter offer. Then it will be up to you to decide whether to accept their counter, or offer a counter to the counter offer. Realize, you’ll be dealing with a process that probably involves multiple people at the bank, and they don’t work evenings or weekends. It’s not unusual for the process of offers and counter offers to take days or even weeks.

Call or email us for more information on foreclosure properties ...

Rita Gibbons
Managing Agent - REO Specialist
Virginia REO Services LLC - Linton Hall Realtors
12753 Braemar Village Plaza, Bristow, VA 20136
Direct #: 571-330-0741 ~ Fax #: 703-563-6261
Email: RGibbons@LintonHallRealtors.com