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Buying REO property or a foreclosure in Selah?
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Just as with any property purchase, your wisest move is to hire a professional real estate agent.
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What is an REO?
"REO" or Real Estate Owned are houses which have been through foreclosure that the bank or mortgage company presently holds. This is different than a property up for foreclosure auction.
If you buy 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. The buyer must also be able to pay with cash in hand. Finally, you'll receive the property totally as is. That may consist of prevailing liens and even current denizens that need to be thrown out.
A bank-owned property, by contrast, is a much cleaner and attractive option. 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 plan for the issuance of a title insurance policy to the buyer at closing.
Note 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 typically requires sellers to make known any defects of which they are aware.
By hiring Jody Hurst & Associates Realty, you can rest assured knowing all parties are fulfilling Washington state disclosure requirements.
Is REO property in Selah a bargain?
It's frequently thought that any foreclosure must be a steal and a chance for guaranteed profit. This frequently isn't true. You have to be prudent about buying a repossession if your intent is profit from the sale. While it's true that 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 foreclosures. Still there are also many REOs that are not good buys and not likely to turn a profit.
Time to make an offer?
Most mortgage companies have staff dedicated to REO that you'll work with when buying REO property from them. Usually 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 find out as much as you can about their knowledge about the condition of the property and what their process is for taking offers. Since banks usually sell REO properties "as is", you'll want to be sure and include an inspection contingency in your offer that gives you time to check for unseen damage and terminate the offer if you find it.
As with making any offer on real estate, you'll make your offer more attractive if you can include documentation of your ability to pay, such as a pre-approval letter from a lender.
After you've made your offer, you can expect the bank to counter offer. Then it will be up to you to decide whether to accept their counter, or make another counter offer.
Your transaction could be settled in one 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.
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