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Purchasing REO property or a foreclosure in Little Chute?
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Just as with any home purchase, your smartest move is to hire a professional real estate agent.
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What's an REO?
"REO" is Real Estate Owned. These are houses which have completed the foreclosure process and are presently possessed by the bank or mortgage company. This differs from 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 accrued during the foreclosure process. The buyer must also be ready to pay with cash in hand. Finally, you'll get the property 100% as is. That could consist of standing liens and even current residents that need to be kicked out.
A bank-owned property, on the contrary, is a much cleaner and attractive transaction. The REO property did not find a buyer during foreclosure auction. Now the lender owns it. The lender will see to the elimination of tax liens, evict occupants if needed and generally prepare for the issuance of a title insurance policy to the buyer at closing.
Take notice that REOs may be exempt from standard disclosure requirements.
For example, in Texas, it is optional for foreclosures to have a Property Disclosure Statement,
a document that normally requires sellers to make known any defects of which they are aware.
By hiring Hietpas Realty, you can rest assured knowing all parties are fulfilling Wisconsin state disclosure requirements.
Am I guaranteed a low price when purchasing a bank owned property in Little Chute?
It's commonly thought that any foreclosure must be a good buy and a chance for guaranteed profit. This frequently isn't true. You have to be very careful about buying a REO if your intent is make a profit. Even though the bank is often anxious to offload it promptly, they are also motivated to minimize any losses.
When considering what to pay for a foreclosure, you need to look closely at 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 buying foreclosures. But there are also many REOs that are not good buys and may not be money makers.
Prepared to make an offer?
Most lenders have staff dedicated to REO that you'll work with when buying REO property from them. Normally 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 find out 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 almost always 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 unknown damage and terminate the offer if you find it.
As with making any offer on real estate, providing documentation proving your ability to pay may make your offer more attractive, such as a pre-approval letter from a lender.
After you've made your offer, you can expect the bank to make a counter offer. From there it will be your choice whether to accept their counter, or offer a counter to the counter offer.
Your deal could be final in a single day, but that's rare. Since offers and counter offers usually allow a day or more for the other party to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer.
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