Buying REO property or a foreclosure in Virginia?


	Foreclosed upon and bank owned property purchases require the assistance of an experience professional. For more information, you can contact me through my site or e-mail me. I'm glad to address questions you have regarding real estate foreclosures.

What is an REO?

"REO" is short for Real Estate Owned. These are properties which have completed the foreclosure process that the bank or mortgage company now possesses. This is not the same as a property up for foreclosure auction. Bear Country Realty has experience to share with foreclosures and bank owned properties in Virginia, Minnesota

Bear Country Realty has experience to share with foreclosures and bank owned properties in Virginia, Minnesota

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. You must also be able to pay with cash in hand. To top everything off, you'll get the property completely as is. That might consist of existing liens and even current residents that need to be thrown out.

A bank-owned property, conversely, is a more tidy and attractive proposition. The REO property did not find a buyer during foreclosure auction. Now the bank owns it. The bank will handle 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 exempt from giving a Transfer Disclosure Statement, a document that normally requires sellers to tell you about any defects of which they are knowledgeable. By hiring Bear Country Realty, you can rest assured knowing all parties are fulfilling Minnesota state disclosure requirements.

Is REO property in Virginia a bargain?

It is 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 prudent about buying a repossession if your intent is to make money off of it. Even though the bank is often anxious to sell it quickly, they are also motivated to minimize any losses.

Bear Country Realty has experience to share with foreclosures and bank owned properties in Virginia, Minnesota

When contemplating the value of 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 and selling foreclosures. But there are also many REOs that are not good buys and not likely to turn a profit.

Time to make an offer?

Most mortgage companies have staff dedicated to REO that you'll work with when buying REO property from them. To get their properties advertised on the local MLS, the lender will usually contract with a listing agent.

Prior to 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 regarding the condition of the property and what their process is for accepting offers. Since banks most commonly 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 hidden damage and retract the offer if you find it. As with making any offer on real estate, providing documentation showing your ability to pay may make your offer more attractive, such as a pre-approval letter from a lender.

After you've presented your offer, you can expect the bank to respond with a counter offer. At this point it will be your choice whether to accept their counter, or offer a counter to the counter offer. Your deal could be settled in a single 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.