Interested in REO property or a foreclosure in Charlotte?
Foreclosed upon and bank owned property purchases require the assistance of an experience professional.
What's an REO?
"REO" or Real Estate Owned are houses which have been through foreclosure that the bank or mortgage company now owns. This is not the same as a property 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 added during the foreclosure process. You must also be prepared to pay with cash in hand. To top everything off, you'll accept the property entirely as is. That possibly will involve prevailing liens and even current denizens that may require expulsion.
A bank-owned property, by contrast, is a more tidy and attractive transaction. The REO property was unable to find a buyer during foreclosure auction. Now the lender owns it. The bank will handle the elimination of tax liens, evict occupants if needed and generally organize for the issuance of a title insurance policy to the buyer at closing.
You should be aware that REOs may be exempt from typical disclosure requirements. In California, for example, banks are not required to give a Transfer Disclosure Statement, a document that typically requires sellers to make known any defects of which they are informed. By hiring Tanya Lovejoy-Capers, Broker, ABR, CNHS, CRS, e-PRO, you can rest assured knowing all parties are fulfilling North Carolina state disclosure requirements.
Is REO property in Charlotte a bargain?
It is frequently presumed that any foreclosure must be a good deal and a chance for guaranteed profit. This isn't always the case. You have to be very careful about buying a REO if your intent is to make a profit. While it's true that the bank is typically anxious to offload it promptly, they are also looking to minimize any losses.
Look closely at the listing and sales prices of competing properties in the neighborhood when making an offer on an REO. And factor in any repairs or remodeling necessary to prepare the house for resale or moving in. 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 not likely to turn a profit.
Time to make an offer?
Most lenders have a department 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 usually use 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 their knowledge concerning the condition of the property and what their process is for accepting offers. Since banks typically sell REO properties "as is", it may be in your best interest to 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, it's customary for 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 might be final in one day, but that's usually not the case. Since offers and counter offers usually give the other party a day or longer to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer.