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Buying REO property or a foreclosure in Mobile?
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Foreclosed upon and bank owned property purchases require the assistance of an experience professional.
If you have questions about real estate in Mobile, Alabama, call me or send me an e-mail.
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What's an REO?
"REO" or Real Estate Owned are homes which have been foreclosed upon that the bank or mortgage company currently possesses. 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 amassed during the foreclosure process. The buyer must also be able to pay with cash in hand. And on top of all that, you'll receive the property entirely as is. That possibly may comprise of prevailing liens and even current denizens that may require expulsion.
A bank-owned property, conversely, is a much neater and attractive option. The REO property did not find a buyer during foreclosure auction. The lender now owns it. The bank will see 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.
Note that REOs may be exempt from standard disclosure requirements.
For example, in North Carolina, it is optional for foreclosures to have a Property Disclosure Statement,
a document that typically requires sellers to reveal any defects they are aware of.
By hiring Roberts Brothers, you can rest assured knowing all parties are fulfilling Alabama state disclosure requirements.
Am I assured a bargain when investing in a bank owned property in Mobile?
It is occasionally thought that any foreclosure must be a good buy and an opportunity for guaranteed profit. This frequently isn't true. You have to be prudent about buying a repossession if your intent is make a profit. Even though the bank is often eager to offload it soon, they are also motivated to minimize any losses.
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 remodeling necessary to prepare the house for resale or moving in.
The bargains with money making potential exist, and many people do very well buying and selling foreclosures. Still 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 staff dedicated to REO that you'll work with while buying REO property from them. Commonly 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 find out as much as you can about their knowledge concerning the condition of the property and what their process is for receiving offers. Since banks usually sell REO properties "as is", you'll want to be sure and include an inspection contingency in your offer that gives you time to check for unseen 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 goes for any type of real estate offer.)
Once 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 make another counter offer.
Realize, 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. Roberts Brothers is accustomed to these situations and will work to ensure there are no unnecessary delays.
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