Just as with any property purchase, your wisest move is to hire a professional real estate agent.
Should you have any questions regarding real estate in Rehoboth, Massachusetts, call me or send me an e-mail.
What is an REO?
"REO" means Real Estate Owned. These are properties which have been foreclosed upon and are now owned by the bank or mortgage company. This is unlike 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 accumulated during the foreclosure process. You must also be prepared to pay with cash in hand. To top everything off, you'll receive the property completely as is. That possibly will consist of current liens and even current occupants that need to be thrown out.
A bank-owned property, on the other hand, is a much cleaner and attractive transaction. The REO property was unable to find a buyer during foreclosure auction. The bank now owns it. The lender will handle the elimination of tax liens, evict occupants if needed and generally arrange for the issuance of a title insurance policy to the buyer at closing.
Take notice that REOs may be exempt from normal disclosure requirements.
In California, for example, banks are exempt from giving a Transfer Disclosure Statement,
a document that ordinarily requires sellers to make known any defects of which they are informed.
By hiring StartPoint Realty, you can rest assured knowing all parties are fulfilling Massachusetts state disclosure requirements.
Is REO property in Rehoboth a bargain?
It's commonly assumed that any foreclosure must be a good deal and a chance for guaranteed profit. This simply 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 typically anxious to sell it soon, they are also motivated to minimize any losses.
Look closely at the listing and sales prices of comparable homes in the neighborhood when considering the purchase of 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 foreclosures. But there are also many REOs that are not good buys and may not be money makers.
All set to make an offer?
Most mortgage companies have a department dedicated to REO that you'll work with in buying REO property from them. Typically the REO department will use a listing agent to get their REO properties listed on the local MLS.
Prior to 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 what they know regarding the condition of the property and what their process is for receiving offers. Since banks typically 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 unseen damage and terminate the offer if you find it.
As with making any offer on real estate, you'll make your offer more attractive if you can include documentation of your ability to pay, such as a pre-approval letter from a lender.
After you've made your offer, it's customary for the bank to counter offer. At this point it will be up to you to decide whether to accept their counter, or make another counter offer.
Realize, you'll be working with a process that probably 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.
StartPoint Realty 194 Hornbine Road Rehoboth, MA 02769
Look closely at the listing and sales prices of comparable homes in the neighborhood when considering the purchase of 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 foreclosures. But there are also many REOs that are not good buys and may not be money makers.
