Interested in REO property or a foreclosure in Southwest Florida?
Just as with any home purchase, your smartest move is to hire a professional real estate agent.
Should you have questions regarding real estate in Southwest Florida, Florida, call us
or send us an e-mail
What's an REO?
"REO" is short for Real Estate Owned. These are homes which have gone through foreclosure that the bank or mortgage company currently holds. This differs from 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 accrued during the foreclosure process. You must also be prepared to pay with cash in hand. To top everything off, you'll get the property entirely as is. That could comprise of standing liens and even current residents that need to be put out.
A bank-owned property, on the other hand, is a much cleaner and attractive transaction. The REO property was unable to find a buyer during foreclosure auction. The lender now owns it. The bank will attend to 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.
Do be aware that REOs may be exempt from typical disclosure requirements.
For instance, 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 informed.
By hiring The McGuire Group, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Am I assured a low price when purchasing a bank owned property in Southwest Florida?
It's occasionally assumed that any foreclosure must be a good buy and a chance for guaranteed profit. This simply isn't true. You have to be very careful about buying a REO if your intent is to profit from the sale. While it's true that the bank is often eager to offload it quickly, they are also looking to get as much as they can for it.
When considering what to pay for 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.
There are bargains with potential to make money, and many people do very well buying and selling foreclosures. Still, there are also many REOs that are not good buys and may not be money makers.
Prepared to make an offer?
Most banks have staff dedicated to REO that you'll work with when buying REO property from them. Typically 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 what they know concerning the condition of the property and what their process is for getting 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 unknown damage and cancel the offer if you find it.
As with making any offer on real estate, you'll make your offer more attractive if you can include documentation of your ability to pay, such as a pre-approval letter from a lender.
Once you've made your offer, it's customary for the bank to make a counter offer. Then it will be your choice whether to accept their counter, or make another counter offer.
Your deal could be settled 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. The McGuire Group is used to working around the schedules of this type of seller and will do everything possible to ensure there are no unnecessary delays.