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Buying REO property or a foreclosure in Sammamish?
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Making an offer on a bank-owned property is not something to be taken casually.
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.
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What's an REO?
"REO" stands for Real Estate Owned. These are houses which have been foreclosed upon and are presently possessed by the bank or mortgage company. This is not the same as a property 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. The buyer must also be prepared to pay with cash in hand. And on top of all that, you'll receive the property totally as is. That might involve existing liens and even current tenants that need to be put out.
A bank-owned property, conversely, is a much neater and attractive proposition. The REO property was unable to find a buyer during foreclosure auction. Now the lender owns it. The lender will take care of 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 instance, in California, banks are not required to give a Transfer Disclosure Statement,
a document that ordinarily requires sellers to make known any defects of which they are knowledgeable.
By hiring Trishmark Real Estate, you can rest assured knowing all parties are fulfilling Washington state disclosure requirements.
Is REO property in Sammamish a bargain?
It is occasionally assumed that any REO must be a bargain and an opportunity for guaranteed profit. This often isn't true. You have to be cautious about buying a REO if your intent is make money. Even though the bank is typically anxious to offload it promptly, they are also looking to minimize any losses.
When contemplating what to pay for REO property, 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.
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.
All set to make an offer?
Most lenders have staff dedicated to REO that you'll work with in buying REO property from them. To get their properties advertised on the local MLS, the lender will often contract with a listing agent.
Before making your offer, you'll want 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 getting offers. Since banks usually sell REO properties "as is", you may want 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.
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.
Once you've submitted your offer, you can expect the bank to make a counter offer. Then it will be your choice whether to accept their counter, or submit another counter offer.
Your deal could 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. Trishmark Real Estate is accustomed to these situations and will work to ensure there are no undue delays.
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