Purchasing REO property or a foreclosure in Henderson?
Making an offer on a bank-owned property is not something to be taken lightly.
If you have questions regarding real estate in Henderson, Nevada, call me
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What is an REO?
"REO" or Real Estate Owned are properties which have gone through foreclosure and are now owned by the bank or mortgage company. This is unlike real estate up for foreclosure auction.
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 willing to pay with cash in hand. To top everything off, you'll receive the property totally as is. That possibly may comprise of prevailing liens and even current tenants that may require removal.
A bank-owned property, conversely, is a much cleaner and attractive deal. The REO property was unable to find a buyer during foreclosure auction. Now the lender owns it. The lender will attend to the removal of tax liens, evict occupants if needed and generally organize for the issuance of a title insurance policy to the buyer at closing.
You should be aware that REOs may be exempt from standard disclosure requirements.
For example, in Nevada, it is optional for foreclosures to have a Property Disclosure Statement,
a document that usually requires sellers to disclose any defects they are aware of.
By hiring Mei Loh-Becker, you can rest assured knowing all parties are fulfilling Nevada state disclosure requirements.
Am I assured a low price when purchasing an REO property in Henderson?
It is occasionally believed that any REO must be a good buy and a possibility for easy money. This isn't necessarily true. You have to be very careful about buying a repossession if your intent is to make money. While it's true that the bank is usually anxious to offload it fast, they are also motivated to get as much as they can for it.
Look closely at the listing and sales prices of similar homes in the neighborhood when considering the purchase of an REO. And factor in any repairs or remodeling necessary to prepare the house for resale or moving in.
The bargains with money making potential exist, and many people do very well buying foreclosures. However, there are also many REOs that are not good buys and may not be money makers.
Ready to make an offer?
Most mortgage companies have a department dedicated to REO that you'll work with while 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 to contact either the listing agent or REO department at the bank and discover as much as you can about their knowledge concerning the condition of the property and what their process is for accepting offers. Since banks almost always 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 hidden damage and cancel the offer if you find it.
If, as a buyer, you can provide documentation showing 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 goes for any real estate offer.)
After you've submitted your offer, you can expect the bank to make a counter offer. Then it will be your decision whether to accept their counter, or offer a counter to the counter offer.
Your transaction 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. Mei Loh-Becker is used to working around the schedules of this type of seller and will do everything possible to ensure there are no undue delays.