Purchasing REO property or a foreclosure in Winston-Salem?
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 been foreclosed upon and are presently owned by the bank or mortgage company. This is not the same as 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 ready to pay with cash in hand. Finally, you'll receive the property 100% as is. That possibly may include standing liens and even current residents that may require expulsion.
A bank-owned property, conversely, is a more tidy and attractive deal. The REO property didn't find a buyer during foreclosure auction. The bank now owns it. The lender will handle the elimination of tax liens, evict occupants if needed and generally plan 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 example, in Texas, it is optional for foreclosures to have a Property Disclosure Statement,
a document that ordinarily requires sellers to reveal any defects they are aware of.
By hiring Quarters Real Estate Services LLC, you can rest assured knowing all parties are fulfilling North Carolina state disclosure requirements.
Am I guaranteed a good deal when investing in an REO property in Winston-Salem?
It's frequently believed that any REO must be a steal and a chance for easy money. This often isn't true. You have to be prudent about buying a repossession if your intent is to make a profit. Even though the bank is typically anxious to offload it soon, they are also motivated to minimize any losses.
When pondering the value of 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 buying foreclosures. Still, there are also many REOs that are not good buys and may lose money.
Time to make an offer?
Most lenders have a department 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 use a listing agent.
Prior to 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 their knowledge about the condition of the property and what their process is for getting 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 unseen damage and withdraw the offer if you find it.
If, as a buyer, you can provide documentation demonstrating 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 holds for any real estate offer.)
After 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 submit another counter offer.
Your deal might 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.