Purchasing REO property or a foreclosure in Cincinnati?
Savvy consumers will turn to a seasoned pro when considering a foreclosed property. For more information, you can contact me through my site or e-mail me. I'm happy to answer questions you have about real estate foreclosures.
What's an REO?
"REO" or Real Estate Owned are properties which have been foreclosed upon and are presently owned by the bank or mortgage company. This is unlike 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. You must also be able to pay with cash in hand. To top everything off, you'll get the property entirely as is. That might consist of prevailing liens and even current occupants that need to be expelled.
A bank-owned property, on the other hand, is a more tidy and attractive deal. The REO property did not find a buyer during foreclosure auction. The bank now owns it. The lender will deal with the removal of tax liens, evict occupants if needed and guarantee clear title and issue a title insurance policy to the buyer at closing.
Do be aware that REOs may be exempt from typical disclosure requirements. For example, in Ohio, it is required for foreclosures to have a Property Disclosure Statement, a document that normally requires sellers to tell you about any defects of which they are aware. But this is usually avoided as they don't disclose anything about the property becasue they have never occupied it. By hiring Doris Palmer Luttrell, you can rest assured knowing all parties are fulfilling Ohio state disclosure requirements.
Is REO property in Cincinnati a bargain?
It's commonly believed that any foreclosure must be a good deal and a chance for guaranteed profit. This isn't always the case. You have to be cautious about buying a repossession if your intent is profit from the sale. While it's true that the bank is typically eager to offload it promptly, they are also looking to get as much as they can for it.
Look carefully at the listing and sales prices of comparable properties in the neighborhood when making an offer on an REO. And factor in any repairs or upgrades necessary to prepare the house for resale or moving in. There are bargains with potential to make money, 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.
Prepared to make an offer?
Most lenders have staff dedicated to REO that you'll work with when buying REO property from them. Commonly 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 your agent 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 accepting offers. Since banks usually 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. As with making any offer on real estate, you'll make your offer more attractive if you can include documentation of your ability to pay, such as a pre-approval letter from a lender. Doris has the education and experience to guide you throughthis process.
Once you've made your offer, you can expect the bank to counter offer. From there it will be your decision whether to accept their counter, or make another counter offer. Realize, you'll be working with a process that usually involves multiple people at the bank, and they don't work evenings or weekends. It's typical for there to be days or even weeks of negotiating back and forth. Be prepared to wait ... and wait some more.
Look carefully at the listing and sales prices of comparable properties in the neighborhood when making an offer on an REO. And factor in any repairs or upgrades necessary to prepare the house for resale or moving in. There are bargains with potential to make money, 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.
