Looking for REO property or a foreclosure in San Marcos?
Smart consumers will turn to a seasoned pro when considering a foreclosed property.
What's an REO?
"REO" or Real Estate Owned are houses which have completed the foreclosure process and are presently owned by the bank or mortgage company. This is different than 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 added during the foreclosure process. You must also be willing to pay with cash in hand. To top everything off, you'll accept the property completely as is. That could consist of current liens and even current residents that need to be evicted.
A bank-owned property, by contrast, is a much neater and attractive transaction. The REO property was unable to find a buyer during foreclosure auction. Now the lender owns it. The lender will take care of the removal of tax liens, evict occupants if needed and generally arrange for the issuance of a title insurance policy to the buyer at closing.
You should be aware that REOs may be exempt from typical disclosure requirements.
For example, in Texas, it is optional for foreclosures to have a Property Disclosure Statement,
a document that normally requires sellers to tell you about any defects they are aware of.
By hiring ERA All Texas Realty, you can rest assured knowing all parties are fulfilling Texas state disclosure requirements.
Is REO property in San Marcos a bargain?
It is commonly presumed that any foreclosure must be a bargain and an opportunity for easy money. This isn't necessarily true. You have to be prudent about buying a REO if your intent is to make money off of it. Even though the bank is typically anxious to offload it promptly, they are also motivated to minimize any losses.
Look closely at the listing and sales prices of competing properties in the neighborhood when considering the purchase of an REO. And factor in any repairs or remodeling necessary to prepare the house for resale or moving in.
The bargains with money making potential exist, and many people do very well flipping foreclosures. Still there are also many REOs that are not good buys and not likely to turn a profit.
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 usually use 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 about the condition of the property and what their process is for receiving offers. Since banks typically sell REO properties "as is", it's often prudent to include an inspection contingency in your offer that gives you time to check for hidden damage and retract 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 presented your offer, it's customary for the bank to respond with a counter offer. From there it will be your decision whether to accept their counter, or make another counter offer.
Your transaction might be final in a single 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. ERA All Texas Realty is are used to working around the schedules of this type of seller and will do everything possible to ensure there are no unnecessary delays.
Look closely at the listing and sales prices of competing properties in the neighborhood when considering the purchase of an REO. And factor in any repairs or remodeling necessary to prepare the house for resale or moving in.
The bargains with money making potential exist, and many people do very well flipping foreclosures. Still there are also many REOs that are not good buys and not likely to turn a profit.
