Looking for REO property or a foreclosure in Gilbert?
Just as with any property purchase, your smartest move is to hire a professional real estate agent.
What is an REO?
"REO" stands for Real Estate Owned. These are properties which have been foreclosed upon and are presently possessed by the bank or mortgage company. This differs from 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 amassed during the foreclosure process. The buyer must also be prepared to pay with cash in hand. And on top of all that, you'll get the property completely as is. That possibly may involve prevailing liens and even current tenants that need to be put out.
A bank-owned property, on the other hand, is a much cleaner and attractive deal. The REO property didn't find a buyer during foreclosure auction. The bank now owns it. The bank will deal with the elimination of tax liens, evict occupants if needed and generally plan 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 North Carolina, it is optional for foreclosures to have a Property Disclosure Statement,
a document that ordinarily requires sellers to reveal any defects they are informed of.
By hiring Prudential Arizona Properties, you can rest assured knowing all parties are fulfilling Arizona state disclosure requirements.
Are REO properties a bargain in Gilbert?
It's commonly presumed that any foreclosure must be a bargain and an opportunity for easy money. This isn't necessarily true. You have to be very careful about buying a repossession if your intent is profit from the sale. Even though the bank is often anxious to sell it promptly, they are also looking to get as much as they can for it.
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.
There are bargains with potential to make money, and many people do very well flipping foreclosures. Still there are also many REOs that are not good buys and may lose money.
Ready to make an offer?
Most mortgage companies have staff dedicated to REO that you'll work with while 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 find out as much as you can about their knowledge concerning the condition of the property and what their process is for getting offers. Since banks typically sell REO properties "as is", you'll want to be sure and include an inspection contingency in your offer that gives you time to check for unseen damage and terminate 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 goes for any real estate offer.)
Once you've submitted your offer, you can expect the bank to make a counter offer. Then it will be up to you to decide whether to accept their counter, or make another counter offer.
Your deal could be settled in one 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.
3701 E. Baseline Rd., Suite F-102 Gilbert, AZ 85234 Phone: Cell: Fax:
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.
There are bargains with potential to make money, and many people do very well flipping foreclosures. Still there are also many REOs that are not good buys and may lose money.