Interested in REO property or a foreclosure in Beverly Hills?
Savvy consumers will turn to a seasoned pro when considering a foreclosed property.
What is an REO?
"REO" stands for Real Estate Owned. These are properties which have gone through foreclosure and are now possessed by the bank or mortgage company. This is not the same as 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 amassed during the foreclosure process. You must also be ready to pay with cash in hand. Finally, you'll get the property 100% as is. That possibly could comprise of prevailing liens and even current residents that may require eviction.
A bank-owned property, conversely, is a much cleaner and attractive option. The REO property did not find a buyer during foreclosure auction. The bank now owns it. The lender will take care of the removal 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 normal disclosure requirements.
For instance, in California, banks are not required to give a Transfer Disclosure Statement,
a document that usually requires sellers to disclose any defects of which they are aware.
By hiring Aviva Motavassel Realty, you can rest assured knowing all parties are fulfilling California state disclosure requirements.
Are REO properties a bargain in Beverly Hills?
It is occasionally believed that any foreclosure must be a steal and an opportunity for easy money. This isn't necessarily the case. You have to be prudent about buying a repossession if your intent is to make money off of it. While it's true that the bank is typically eager to offload it soon, they are also motivated to get as much as they can for it.
When contemplating what to pay for REO property, carefully analyze comparable sales in the neighborhood and be sure to take into account the time and cost of any repairs or remodeling needed to prepare the house for resale.
The bargains with money making potential exist, and many people do very well flipping foreclosures. However there are also many REOs that are not good buys and may not be money makers.
Time to make an offer?
Most banks have staff dedicated to REO that you'll work with when buying REO property from them. Typically 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 learn as much as you can about their knowledge regarding the condition of the property and what their process is for getting offers. Since banks almost always sell REO properties "as is", it's often prudent to include an inspection contingency in your offer that gives you time to check for unseen damage and retract the offer if you find it.
If, as a buyer, you can provide documentation showing your ability to pay, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This holds for any type of real estate offer.)
Once you've submitted your offer, it's customary for the bank to respond with a counter offer. Then it will be your decision whether to accept their counter, or make another counter offer.
Understand, you'll be contending with a process that probably involves several people at the bank, and they don't work evenings or weekends. It's not uncommon for there to be days or even weeks of negotiating back and forth. Aviva Motavassel Realty is are used to working around the schedules of this type of seller and will do everything possible to ensure there are no undue delays.
When contemplating what to pay for REO property, carefully analyze comparable sales in the neighborhood and be sure to take into account the time and cost of any repairs or remodeling needed to prepare the house for resale.
The bargains with money making potential exist, and many people do very well flipping foreclosures. However there are also many REOs that are not good buys and may not be money makers.