Buying REO property or a foreclosure in Snohomish?


	Foreclosed upon and bank owned property purchases require the assistance of an experience professional.

What is an REO?

"REO" means Real Estate Owned. These are properties which have completed the foreclosure process that the bank or mortgage company now possesses. This is not the same as a property up for foreclosure auction. Brenda Rumball, CRS, GRI, CIPS, E-Pro has experience to share with foreclosures and bank owned properties in Snohomish, Washington

Brenda Rumball, CRS, GRI, CIPS, E-Pro has experience to share with foreclosures and bank owned properties in Snohomish, Washington

If you buy 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 willing to pay with cash in hand. To top everything off, you'll accept the property totally as is. That possibly may include current liens and even current tenants that may require eviction.

A bank-owned property, by contrast, is a more tidy and attractive option. The REO property did not find a buyer during foreclosure auction. The lender now owns it. The lender will deal with the elimination of tax liens, evict occupants if needed and generally organize for the issuance of a title insurance policy to the buyer at closing.

You should be aware that REOs may be exempt from typical disclosure requirements. For example, in Nevada, it is optional for foreclosures to have a Property Disclosure Statement, a document that usually requires sellers to tell you about any defects they are informed of. By hiring Brenda Rumball, CRS, GRI, CIPS, E-Pro, you can rest assured knowing all parties are fulfilling Washington state disclosure requirements.

Are REO properties a bargain in Snohomish?

It's frequently presumed that any foreclosure must be a steal and a possibility for guaranteed profit. This isn't always the case. You have to be cautious about buying a REO if your intent is make a profit. While it's true that the bank is typically anxious to sell it fast, they are also motivated to get as much as they can for it.

Brenda Rumball, CRS, GRI, CIPS, E-Pro has experience to share with foreclosures and bank owned properties in Snohomish, Washington

Look closely at the listing and sales prices of competing 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 flipping 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 banks have a department 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 frequently hire a listing agent.

Prior to 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 what they know concerning the condition of the property and what their process is for accepting offers. Since banks typically sell REO properties "as is", you may want to include an inspection contingency in your offer that gives you time to check for unseen damage and cancel the offer if you find it. As with making any offer on real estate, providing documentation showing your ability to secure financing may make your offer more attractive, such as a pre-approval letter from a lender.

After you've presented your offer, you can expect the bank to counter offer. From there it will be up to you to decide whether to accept their counter, or offer a counter to the counter offer. Your deal could be settled in a single day, but that's rare. 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.