|
REOs are bank owned properties that did not sell when the foreclosure auction took place, usually due to no bids or too low bids. These properties can be purchased directly from the banks.
REOs vs. Foreclosures
An REO (Real Estate Owned) is a property that goes back to the mortgage company after an unsuccessful foreclosure auction. Most foreclosure auctions do not result in bids. Usually if there was enough equity in the property to satisfy the loan, the homeowner would have tried to sell the property and pay off the bank. That is why the property ends up at a foreclosure or trustee sale.
Foreclosure sales begin with a minimum bid that includes the loan balance, any accrued interest, plus attorney's fees and any costs association with the foreclosure process. In order to bid at a foreclosure auction, you must have a cashier's check in your hand for the full amount of your bid.
If you are the successful bidder, you receive the property in "as is" condition, which may include someone still living in the property. There may also be other liens against the property. Since what is owed to the bank is almost always more than what the property is worth, very few foreclosure auctions result in a successful sale. Then the property "reverts" to the bank. It becomes an REO, or "real estate owned" property.
Vancouver WA REO Properties For Sale
The bank now owns the property and the mortgage loan no longer exists. The bank will handle the eviction, if necessary, and may do some repairs. They will negotiate with the IRS for removal of tax liens and pay off any homeowner's association dues. As a purchaser of an REO property, the buyer will receive a title insurance policy and the opportunity to investigate the property.
A bank owned property might not be a great bargain. Do your homework with Terrie Cox before making an offer. Make sure that the price you pay is comparable to other homes in the neighborhood. Consider the costs of needed repairs and renovation, including time to complete them. Don't get caught up in a 'bidding war' and pay over market value. It's an old myth that "foreclosures" are a bargain.
Since there is no face-to-face presentation to the bank, provide the listing agent with a pre-qualification or better yet, a pre-approval letter and buyer biography. Make your offer easy to accept. Remember that REO's sell at pretty close to full market value and are not the good deals presented on late night television.
|
