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Purchasing REO property or a foreclosure in Hicksville?
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Savvy consumers will turn to a seasoned pro when considering a foreclosed property. Should you have questions regarding real estate in Hicksville, New York, call me or send me an e-mail. |
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What's an REO?"REO" is an abbreviation for Real Estate Owned. These are properties which have been through foreclosure that the bank or mortgage company currently possesses. This is unlike real estate 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 accrued during the foreclosure process. You must also be able to pay with cash in hand. To top everything off, you'll receive the property completely as is. That possibly could consist of current liens and even current occupants that may require expulsion.
A bank-owned property, by contrast, is a much neater and attractive deal. The REO property did not find a buyer during foreclosure auction. The bank now owns it. The lender will see to the removal of tax liens, evict occupants if needed and generally organize for the issuance of a title insurance policy to the buyer at closing.
Note that REOs may be exempt from normal 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 of which they are aware. By hiring Donovan Brothers Realty Inc., you can rest assured knowing all parties are fulfilling New York state disclosure requirements.
Is REO property in Hicksville a bargain?It is commonly assumed that any foreclosure must be a good deal and an opportunity for guaranteed profit. This often isn't true. You have to be cautious about buying a REO if your intent is profit from the sale. Even though the bank is usually eager to offload it promptly, they are also looking to get as much as they can for it.
 When considering 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 not be money makers.
All set to make an offer?Most banks 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 often hire a listing agent.
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 receiving offers. Since banks usually sell REO properties "as is", you may want to include an inspection contingency in your offer that gives you time to check for unseen damage and withdraw the offer if you find it. As with making any offer on real estate, your offer may be more attractive if you can include documentation of your ability to pay, such as a pre-approval letter from a lender.
After you've submitted your offer, you can expect the bank to make a counter offer. Then it will be your decision whether to accept their counter, or submit another counter offer. Your transaction could be settled in one day, but that's rare. 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. Donovan Brothers Realty Inc. is are used to working around the schedules of this type of seller and will do everything possible to ensure there are no unnecessary delays.
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