Interested in REO property or a foreclosure in Roseville?
Just as with any property purchase, your wisest move is to hire a professional real estate agent.
What's an REO?
"REO" means Real Estate Owned. These are homes which have completed the foreclosure process and are currently possessed by the bank or mortgage company. This is unlike 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 accrued during the foreclosure process. You must also be willing to pay with cash in hand. Finally, you'll accept the property 100% as is. That could consist of standing liens and even current residents that may require eviction.
A bank-owned property, by contrast, is a more tidy and attractive proposition. The REO property did not find a buyer during foreclosure auction. Now the lender owns it. The bank will attend 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.
Do be aware that REOs may be exempt from standard disclosure requirements.
For example, in California, banks do not have to give a Transfer Disclosure Statement,
a document that typically requires sellers to tell you about any defects of which they are knowledgeable.
By hiring Neighbors Home Realty, you can rest assured knowing all parties are fulfilling California state disclosure requirements.
Is REO property in Roseville a bargain?
It's occasionally presumed that any foreclosure must be a bargain and an opportunity for guaranteed profit. This simply isn't true. 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 eager to offload it promptly, they are also motivated to minimize any losses.
Look closely at the listing and sales prices of comparable 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.
It is possible to find REOs with money-making potential, 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.
Ready to make an offer?
Most banks have a department dedicated to REO that you'll work with in buying REO property from them. Usually 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 getting offers. Since banks almost always sell REO properties "as is", it's often prudent to include an inspection contingency in your offer that gives you time to check for hidden damage and retract the offer if you find it.
If, as a buyer, you can provide documentation proving your ability to pay, 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.)
After you've presented your offer, you can expect the bank to respond with a counter offer. Then it will be your decision whether to accept their counter, or offer a counter to the counter offer.
Realize, you'll be working with a process that most likely involves multiple people at the bank, and they don't work evenings or weekends. It's typical for the process of offers and counter offers to take days or even weeks.