Interested in REO property or a foreclosure in La Jolla?
Foreclosed upon and bank owned property purchases require the assistance of an experience professional. Should you have questions regarding real estate in La Jolla, California, call me or send me an e-mail.
What's an REO?
"REO" is an abbreviation for Real Estate Owned. These are properties which have completed the foreclosure process that the bank or mortgage company now owns. This is different than 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 able 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 expelled.
A bank-owned property, on the other hand, is a much neater and attractive proposition. The REO property was unable to find a buyer during foreclosure auction. The lender now owns it. The bank will handle the removal of tax liens, evict occupants if needed and generally organize for the issuance of a title insurance policy to the buyer at closing.
Note that REOs may be exempt from typical disclosure requirements. For example, in California, banks are exempt from giving a Transfer Disclosure Statement, a document that usually requires sellers to disclose any defects they are aware of. By hiring David Heller Real Estate , you can rest assured knowing all parties are fulfilling California state disclosure requirements.
Am I guaranteed a good deal when purchasing a bank owned property in La Jolla?
It's sometimes presumed that any REO must be a good buy and a chance for easy money. This isn't necessarily true. You have to be cautious about buying a REO if your intent is to make money off of it. Even though the bank is often anxious to offload it fast, they are also motivated to get as much as they can for it.
Look carefully at the listing and sales prices of comparable properties in the neighborhood when considering the purchase of an REO. And factor in any repairs or upgrades necessary to prepare the house for resale or moving in. There are bargains with potential to make money, and many people do very well flipping foreclosures. But there are also many REOs that are not good buys and not likely to turn a profit.
All set to make an offer?
Most lenders have staff dedicated to REO that you'll work with when buying REO property from them. To get their properties advertised on the local MLS, the lender will frequently hire a listing agent.
Before 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 regarding the condition of the property and what their process is for receiving offers. Since banks usually sell REO properties "as is", it's often prudent 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, providing documentation showing your ability to pay 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 respond with a counter offer. At this point it will be your decision whether to accept their counter, or offer a counter to the counter offer. Your deal might be final in one day, but that's rare. Since offers and counter offers usually allow a day or more for the other party to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer. David Heller Real Estate is accustomed to these situations and will work to ensure there are no unnecessary delays.
David Heller Real Estate, CA DRE #01014338 7708 Regents Road #1 San Diego, CA 92122
Look carefully at the listing and sales prices of comparable properties in the neighborhood when considering the purchase of an REO. And factor in any repairs or upgrades necessary to prepare the house for resale or moving in. There are bargains with potential to make money, and many people do very well flipping foreclosures. But there are also many REOs that are not good buys and not likely to turn a profit.
