Looking for REO property or a foreclosure in Redlands?
Just as with any property purchase, your smartest move is to hire a professional real estate agent. For more information, simply contact me through my site or e-mail me. I'm happy to answer any questions you have about real estate foreclosures.
What's an REO?
"REO" is short for Real Estate Owned. These are properties which have completed the foreclosure process that the bank or mortgage company presently possesses. 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 accrued during the foreclosure process. You must also be ready to pay with cash in hand. Finally, you'll get the property completely as is. That possibly may comprise of current liens and even current denizens that may require eviction.
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 bank will see to the removal 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 Texas, it is optional for foreclosures to have a Property Disclosure Statement, a document that ordinarily requires sellers to reveal any defects of which they are informed. By hiring Orangehill Realty, you can rest assured knowing all parties are fulfilling California state disclosure requirements.
Are REO properties a bargain in San Bernardino County?
It is occasionally thought that any foreclosure must be a steal and a possibility for easy money. This isn't necessarily true. You have to be prudent about buying a REO if your intent is profit from the sale. Even though the bank is typically eager to sell it soon, they are also motivated to get as much as they can for it.
Look carefully at the listing and sales prices of similar properties in the neighborhood when making an offer on an REO. And factor in any repairs or upgrades necessary to prepare the house for resale or moving in. The bargains with money making potential exist, and many people do very well buying foreclosures. But there are also many REOs that are not good buys and not likely to turn a profit.
Ready to make an offer?
Most mortgage companies have staff dedicated to REO that you'll work with when buying REO property from them. Typically the REO department will use a listing agent to get their REO properties listed on the local MLS.
Before 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 their knowledge concerning the condition of the property and what their process is for receiving offers. Since banks typically sell REO properties "as is", you may want to include an inspection contingency in your offer that gives you time to check for unknown damage and terminate the offer if you find it. If, as a buyer, you can provide documentation showing 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 holds for any real estate offer.)
Once you've made your offer, it's customary for the bank to make a counter offer. At this point it will be up to you to decide whether to accept their counter, or make another counter offer. Understand, you'll be working with a process that most likely involves several 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. Orangehill Realty is accustomed to these situations and will work to ensure there are no undue delays.
Look carefully at the listing and sales prices of similar properties in the neighborhood when making an offer on an REO. And factor in any repairs or upgrades necessary to prepare the house for resale or moving in. The bargains with money making potential exist, and many people do very well buying foreclosures. But there are also many REOs that are not good buys and not likely to turn a profit.
