Making an offer on REO property or a foreclosure in Madera?


	Investing in a bank-owned property is not something to be taken lightly.

What's an REO?

"REO" or Real Estate Owned are homes which have completed the foreclosure process that the bank or mortgage company currently possesses. This differs from a property up for foreclosure auction. The Chu Group at CENTURY 21 M&M AND ASSOCIATES has experience to share with foreclosures and bank owned properties in Madera, California

The Chu Group at CENTURY 21 M&M AND ASSOCIATES has experience to share with foreclosures and bank owned properties in Madera, California

If you buy a property during a foreclosure sale, you must pay at least the loan balance plus any interest and other fees amassed during the foreclosure process. The buyer must also be willing to pay with cash in hand. Finally, you'll receive the property 100% as is. That could include prevailing liens and even current residents that need to be put out.

A bank-owned property, on the contrary, is a much cleaner and attractive transaction. The REO property was unable to find a buyer during foreclosure auction. Now the lender owns it. The lender will see to the removal of tax liens, evict occupants if needed and generally prepare 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 typically requires sellers to reveal any defects they are informed of. By hiring The Chu Group at CENTURY 21 M&M AND ASSOCIATES, you can rest assured knowing all parties are fulfilling California state disclosure requirements.

Am I guaranteed a low price when investing in a bank owned property in Madera?

It is frequently believed that any REO must be a good deal and a possibility for easy money. This often isn't true. You have to be very careful about buying a repossession if your intent is make a profit. Even though the bank is often eager to sell it soon, they are also looking to minimize any losses.

The Chu Group at CENTURY 21 M&M AND ASSOCIATES has experience to share with foreclosures and bank owned properties in Madera, California

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. The bargains with money making potential exist, and many people do very well buying foreclosures. But there are also many REOs that are not good buys and may lose money.

Prepared to make an offer?

Most banks have a department 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 about the condition of the property and what their process is for accepting offers. Since banks almost always 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. As with making any offer on real estate, providing documentation of your ability to secure financing may make your offer more attractive, such as a pre-approval letter from a lender.

After you've submitted 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 offer a counter to the counter offer. Understand, you'll be working with a process that generally involves a group of 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. The Chu Group at CENTURY 21 M&M AND ASSOCIATES is are used to working around the schedules of this type of seller and will do everything possible to ensure there are no undue delays.