Buying REO property or a foreclosure in Raleigh?


	Purchasing a bank-owned property is not something to be taken lightly. If you have any questions regarding real estate in Raleigh, North Carolina, call me or send me an e-mail.

What is an REO?

"REO" is Real Estate Owned. These are homes which have completed the foreclosure process that the bank or mortgage company now possesses. This is different than a property up for foreclosure auction. Michelle Conway, Broker, ABR, CRS has experience to share with foreclosures and bank owned properties in Raleigh, North Carolina

Michelle Conway, Broker, ABR, CRS has experience to share with foreclosures and bank owned properties in Raleigh, North Carolina

If you buy 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 able to pay with cash in hand. To top everything off, you'll receive the property entirely as is. That may involve standing liens and even current residents that may require removal.

A bank-owned property, on the other hand, is a much cleaner and attractive deal. The REO property didn't find a buyer during foreclosure auction. Now the lender owns it. The lender will see to 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 normal disclosure requirements. For example, in Nevada, it is optional for foreclosures to have a Property Disclosure Statement, a document that ordinarily requires sellers to tell you about any defects of which they are informed. By hiring Michelle Conway, Broker, ABR, CRS, you can rest assured knowing all parties are fulfilling North Carolina state disclosure requirements.

Is REO property in Raleigh a bargain?

It is sometimes assumed that any foreclosure must be a bargain and an opportunity for guaranteed profit. This often isn't true. You have to be very careful about buying a REO if your intent is to make money off of it. While it's true that the bank is often anxious to offload it soon, they are also looking to get as much as they can for it.

Michelle Conway, Broker, ABR, CRS has experience to share with foreclosures and bank owned properties in Raleigh, North Carolina

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. Still there are also many REOs that are not good buys and may lose money.

All set to make an offer?

Most mortgage companies have staff dedicated to REO that you'll work with in buying REO property from them. To get their properties advertised on the local MLS, the lender will typically contract with a listing agent.

Prior to making your offer, you'll want to contact either the listing agent or REO department at the bank and discover as much as you can about what they know concerning the condition of the property and what their process is for accepting offers. Since banks almost always 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 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 type of real estate offer.)

After you've submitted your offer, it's customary for the bank to counter offer. At this point it will be up to you to decide whether to accept their counter, or offer a counter to the counter offer. Understand, you'll be working with a process that probably involves multiple people at the bank, and they don't work evenings or weekends. It's quite common for the process of offers and counter offers to take days or even weeks. Michelle Conway, Broker, ABR, CRS is accustomed to these situations and will work to ensure there are no undue delays.