Interested in REO property or a foreclosure in Dana Point?
Making an offer on a bank-owned property is not something to be taken casually.
What is an REO?
"REO" means Real Estate Owned. These are homes which have been foreclosed upon and are currently held by the bank or mortgage company. This is different than real estate up for foreclosure auction.
If you buy a property during a foreclosure sale, you must pay at least the loan balance plus any interest and other fees added during the foreclosure process. The buyer must also be ready to pay with cash in hand. And on top of all that, you'll get the property 100% as is. That possibly will involve current liens and even current denizens that need to be put out.
A bank-owned property, conversely, is a much cleaner and attractive deal. The REO property didn't find a buyer during foreclosure auction. The bank now owns it. The lender will take care of 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.
For example, in California, banks are not required to give a Transfer Disclosure Statement,
a document that usually requires sellers to make known any defects of which they are aware.
By hiring Wave Crest Financial Group, INC, you can rest assured knowing all parties are fulfilling California state disclosure requirements.
Are REO properties a bargain in Dana Point?
It's sometimes believed that any REO must be a good deal and a possibility for easy money. This isn't necessarily the case. You have to be very careful about buying a repossession if your intent is to make a profit. Even though the bank is typically eager to offload it promptly, they are also motivated to minimize any losses.
When pondering 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.
There are bargains with potential to make money, and many people do very well buying and selling foreclosures. Still, there are also many REOs that are not good buys and not likely to turn a profit.
Ready to make an offer?
Most mortgage companies have staff dedicated to REO that you'll work with when buying REO property from them. Usually 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 discover as much as you can about their knowledge concerning the condition of the property and what their process is for taking offers. Since banks most commonly 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 cancel the offer if you find it.
If, as a buyer, you can provide documentation proving your ability to pay, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This is generally true for any real estate offer.)
After you've presented your offer, you can expect the bank to make a counter offer. At this point it will be your decision whether to accept their counter, or make another counter offer.
Understand, you'll be working with a process that probably involves a group of people at the bank, and they don't work evenings or weekends. It's not unusual for the process of offers and counter offers to take days or even weeks. Wave Crest Financial Group, INC is accustomed to these situations and will work to ensure there are no unnecessary delays.