Buying Foreclosures/REO's

Looking for REO property or a foreclosure in Ladera Ranch?

Foreclosed upon and bank owned property purchases require the assistance of an experience professional.

What is an REO?

"REO" or Real Estate Owned are houses which have completed the foreclosure process and are now owned by the bank or mortgage company. This is not the same as a property 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 added during the foreclosure process. The buyer must also be willing to pay with cash in hand. And on top of all that, you'll receive the property completely as is. That could involve prevailing liens and even current occupants that may require eviction.

A bank-owned property, by contrast, is a much neater and attractive proposition. The REO property was unable to find a buyer during foreclosure auction. The bank now owns it. The bank will deal with the elimination of tax liens, evict occupants if needed and generally prepare for the issuance of a title insurance policy to the buyer at closing.

Note that REOs may be exempt from standard disclosure requirements. For example, in North Carolina, it is optional for foreclosures to have a Property Disclosure Statement, a document that normally requires sellers to tell you about any defects of which they are knowledgeable. By hiring IML Real Estate, you can rest assured knowing all parties are fulfilling California state disclosure requirements.

Am I guaranteed a low price when buying a bank owned property in Orange County?

It's occasionally believed that any REO must be a steal and an opportunity for guaranteed profit. This often isn't true. You have to be very careful about buying a REO if your intent is make money. Even though the bank is usually anxious to offload it quickly, they are also looking to get as much as they can for it.

When pondering what to pay for a foreclosure, you need to look closely at 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 lose money.

Time to make an offer?

Most mortgage companies have staff dedicated to REO that you'll work with while buying REO property from them. Typically the REO department will use a listing agent to get their REO properties listed on the local MLS.

Before making your offer, you'll want to contact either the listing agent or REO department at the bank and learn 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 typically 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 unseen damage and withdraw 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 is generally true for any real estate offer.)

Once you've submitted your offer, it's customary for the bank to counter offer. Then it will be your choice whether to accept their counter, or submit another counter offer. Understand, you'll be working with a process that usually involves multiple people at the bank, and they don't work evenings or weekends. It's not unusual for the process of offers and counter offers to take days or even weeks.

CONTACT US

Doubleday Group

DRE# 01527298

NMLS # 1699776

Brian Doubleday

DRE# 01216167

NMLS # 253467