About REOs and Foreclosures
REOs and foreclosed properties over-supply today's market, the BUYER'S MARKET! Its true...now is the time to buy. Today is the perfect opportunity to buy your first home or even to make you first real estate investment. "How" you ask? "Why"?
At this point, the owners have quit paying on their mortgage or have simply abandoned the premises and handed over the keys. It is in the lenders best interested to mitigate these losses by reselling the home for the best offer possible in the shortest amount of time.
FORECLOSURE VS. REO
A foreclosure is a property where the home owner has quit paying on their mortgage and is no longer able to afford the payment. At this point the bank is taking legal action to revert the asset.
To purchase a foreclosed home, a buyer has to wait for the foreclosure sale which usually takes place at the county court house. The sale price will almost always include the amount still due on the previous mortgage and any other fees incurred by the sale date. Usually, the home is no longer worth what the mortgage amount is and it automatically get reverted back to the bank. At this point, the bank becomes the new owner, the mortgage is erased and the property is considered a Real Estate Owned (REO).
SO YOU WANT TO BUY A BANK OWNED PROPERTY?
Most banks work with the best REO agents in the area that the home is located in, and most will only accept offers that are presented by an REO certified and lender preferred agent. Whether you have already found a home or are looking to find a home... you have come to the right place!
Greetings Virginia Sales Network are experienced with bank owned property. In addition to working directly with the banks to list their properties, we assist many buyers through this process.
The first step to buy a bank owned property, as when buying any other type of home, is to secure financing. This is important when buying a foreclosed property because often, you will have to act quickly once you find the home that is ideal for you. Transactions are time sensitive when dealing with foreclosure and bank owned properties.
Next, find the home you want to buy. We will assist you with providing research of the area that you are interested in and assist to compare the home's price that you are interested in to other similar properties in the area. We will also assist in verifying the property taxes and any maintenance or homeowner association fees that may apply. If you are purchasing a pre-foreclosure property it is very important to find out if there are any other liens on the property since they will have to be paid in order for your to take clear title to the home. During this step it would be a good idea to contact an agent who specializes in REO and foreclosure properties. Our team will be able to guide you through the process and ensure that nothing is overlooked.
Once you have decided that you want to purchase the home, we will present your offer. Due to the competitive real estate market, we recommend that your first offer be your best offer since there may not be an opportunity to negotiate. The offer will then be submitted to the owner of the property along with your pre-qualification.
ABOUT BUYING A BANK-OWNED PROPERTY
When you are looking at REO property you should know that when making an offer, you are dealing not only with a listing and or selling agent, you are dealing indirectly with an asset manager who works with the banks to sell their properties through a listing agent.
When an offer is submitted, your price and terms will be submitted to the asset manager via the listing agent. The asset manager will then either make a decision on the offer or submit it to an investor that owns the loan to make a decision. Often times there are delays in this process because many people past the listing agent are involved in the decision. When buying an REO, it is important to remember that the seller is a financial institution, not a homeowner and has no emotional attachment to the property. This is important to you because, the bank only makes decisions based on what will serve its needs best. They are only interested in receiving serious offers from qualified buyers.
REOs are priced according to market conditions.
In most cases the asset manager has hired several real estate agents to perform a Broker Price Opinion and have ordered an appraisal to determine the listing price. The lender wants to sell the property as soon as possible so they will likely price it aggressively to get a ratified offer within 30 days of listing.
When making an offer, you should consider that the property is probably priced at or below the bottom of the market price. Although lenders expect some negotiation, understand that because they price aggressively, often there are many offers on each property and sometimes they are sold for above list price. It is VERY unlikely that they will accept an offer for much less than what it is listed for (especially during the first 30 days).
REO inventory is very sought after. Submitting absurd offers trying to get a property for "bottom dollar" is a waste of time for everyone involved. You may only have one shot at making an offer, so when placing an offer, you should make it your highest and best.
The process of purchasing an REO is different than buying a traditional property. Greetings Virginia Sales Network with Keller Williams Realty has the experience of both representing buyers in these transactions as well as representing banks to sell these properties. Asset managers hire few agents to represent them and are diligent about their hiring process and hire the best agents. We are grateful to be among the few real estate agents that banks rely on to sell their properties. Our experience benefits our clients that are interested in buying a foreclosed property.
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