Purchasing REO property or a foreclosure in St. Augustine?


	Just as with any home purchase, your smartest move is to hire a professional real estate agent.

What's an REO?

"REO" means Real Estate Owned. These are houses which have completed the foreclosure process and are now possessed by the bank or mortgage company. This is unlike real estate up for foreclosure auction. ROSSELLA BARON has experience to share with foreclosures and bank owned properties in St. Augustine, Florida

ROSSELLA BARON has experience to share with foreclosures and bank owned properties in St. Augustine, Florida

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. You must also be able to pay with cash in hand. To top everything off, you'll accept the property totally as is. That might consist of standing liens and even current occupants that need to be kicked out.

A bank-owned property, on the contrary, is a much neater and attractive proposition. The REO property did not find a buyer during foreclosure auction. Now the lender owns it. The lender 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.

Take notice that REOs may be exempt from typical disclosure requirements. In California, for example, banks are not required to give a Transfer Disclosure Statement, a document that ordinarily requires sellers to tell you about any defects they are knowledgeable of. By hiring ROSSELLA BARON, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.

Are REO properties a bargain in St. Augustine?

It's frequently believed that any REO must be a good deal and a chance for easy money. This simply isn't true. You have to be prudent about buying a REO if your intent is make a profit. Even though the bank is typically anxious to offload it promptly, they are also looking to minimize any losses.

ROSSELLA BARON has experience to share with foreclosures and bank owned properties in St. Augustine, Florida

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 remodeling 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 lose money.

Prepared to make an offer?

Most banks have staff 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 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 learn as much as you can about their knowledge concerning the condition of the property and what their process is for taking offers. Since banks typically 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 proving 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 is generally true for any type of real estate offer.)

Once you've presented your offer, it's customary for the bank to make a counter offer. Then it will be your choice whether to accept their counter, or submit another counter offer. Your deal could be final in one day, but that's usually not the case. Since offers and counter offers usually give the other party a day or longer to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer.