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Making an offer on REO property or a foreclosure in Florida?

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Smart consumers will turn to a seasoned pro when considering a foreclosed property. If you have any questions regarding real estate in Boca Raton, Highland Beach, Delray Beach and surrounding areas in Florida, call PALMETTO REALTY LLC at (561) 826-8010 or send us an e-mail.

What is an REO?
"REO" is short for Real Estate Owned. These are houses which have gone through foreclosure that the bank or mortgage company now possesses. This is unlike real estate up for foreclosure auction. PALMETTO REALTY LLC has experience to share with foreclosures and bank owned properties in Boca Raton, Florida

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. 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 might consist of prevailing liens and even current residents that need to be put out.

A bank-owned property, by contrast, is a much neater and attractive deal. The REO property did not find a buyer during foreclosure auction. The bank now owns it. The lender will attend to the removal of tax liens, evict occupants if needed and generally arrange for the issuance of a title insurance policy to the buyer at closing.

Note that REOs may be exempt from standard disclosure requirements. In California, for example, banks are not required to give a Transfer Disclosure Statement, a document that normally requires sellers to tell you about any defects they are informed of. By hiring PALMETTO REALTY LLC, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.


Are REO properties a bargain in Florida?
It is frequently assumed that any foreclosure must be a good buy and a chance for easy money. This simply isn't true. You have to be very careful about buying repossession if your intent is profit from the sale. Even though the bank is often eager to sell it soon, they are also looking to get as much as they can for it.

PALMETTO REALTY LLC has experience to share with foreclosures and bank owned properties in Boca Raton, FloridaWhen contemplating the value of a foreclosure, carefully analyze 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. It is possible to find REOs with money-making potential, and many people do very well flipping foreclosures. Still there are also many REOs that are not good buys and may not be money makers.
All set to make an offer?
Most lenders have staff dedicated to REO that you'll work with when buying REO property from them. Normally 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 to discover as much as you can about the condition of the property and the bank’s process for taking offers. Since banks most commonly sell REO properties "as is", it's often prudent to include an inspection contingency in your offer that gives you time to check for unknown damage and withdraw the offer if you find it. If, as a buyer, you can provide documentation proving your ability to secure financing, 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 type of real estate offer.)

Once you've made your offer, it's customary for the bank to counter offer. At this point it will be up to you to decide whether to accept their counter, or offer a counter to the counter offer. Your deal might be final in a single day, but that's usually not the case. 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.

 

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