Keller Williams Real Estate
DEBORAH EARLE
1660 Hillhurst Avenue
Los Angeles, CA 90027
ph: 310 925-6056
fax: 310 649-1059
alt: 323 300-1042
deborahe
Foreclosure/REO's
Purchasing REO property or a foreclosure in Los Angeles and surrounding areas?
Foreclosed upon and bank owned property purchases requires the assistance of an experience professional. Should you have questions about real estate in Los Angeles and surrounding areas in California. Call me or send me an e-mail.
What is an REO?
"REO" is short for Real Estate Owned. These are homes which have been through foreclosure and are currently held by the bank or mortgage company. This is different than real estate 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 willing to pay with cash in hand. To top everything off, you'll get the property entirely as is. That could comprise of current liens and even current residents that may require eviction.
A bank-owned property, by contrast, is a much heater and attractive option. The REO property didn't find a buyer during foreclosure auction. Now the lender owns it. The bank will take care of the removal of tax liens, evict occupants if needed and generally prepare for the issuance of a title insurance policy to the buyer at closing.
Take notice that REOs may be exempt from standard disclosure requirements. For example, in Neveda, it is optional for foreclosures to have a Property Disclosure Statement, a document that ordinarily requires sellers to tell you about any defects they are aware of. By hiring Keller Williams Real Estate, you can rest assured knowing all parties are fulfilling California State Disclosure requirements.
Am I guaranteed a bargain when purchasing a bank owned property in Los Angeles and surrounding areas?
It's frequently assumed that any REO must be a good buy and an opportunity for guaranteed profit. This often isn't true. You have to be prudent about buying a REO if your intent is profit from the sale. Even though the bank is often eager to sell it fast, they are also motivated to get as much as they can for it.
When pondering what to pay for REO property, carefully analyze 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. It is possible to find REOs with money-making potential, and many people do very well buying foreclosures. Still there are also many REOs that are not good buys and not likely to turn a profit.
Ready to make an offer?
Most banks 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 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 discover 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", it may be in your best interest to include an inspection contingency in your offer that gives you time to check for hidden damage and cancel 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 type of real estate offer.) After you've submitted your offer, it's customary for the bank to counter offer. From there it will be your choice whether to accept their counter, or make another counter offer. Realize, you'll be working with a process that generally involves a group of people at the bank, and they don't work evenings or weekends. It's typical for there to be days or even weeks of negotiating back and forth. Keller Williams Real Estate is accustomed to these situations and will work to ensure there are no unnecessary delays. |
1660 Hillhurst Avenue
Los Angeles, CA 90027
ph: 310 925-6056
fax: 310 649-1059
alt: 323 300-1042
deborahe
