What's an REO / Foreclosure Listing?
"REO" or Real Estate Owned are properties which have already been through the foreclosure process, and are now possessed by the bank or mortgage company.
The REO property either didn't find a buyer during the foreclosure auction, or the bank bought the property outright. The bank now owns it. The bank will handle the elimination 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 standard disclosure requirements. In Oregon, REO properties are exempt from the requirements of a Property Disclosure Statement, a document that ordinarily requires sellers to make known any defects they are informed of about the property. By hiring an Advantage Real Estate Network Broker, you can rest assured, knowing all parties are fulfilling Oregon state disclosure requirements.
Are REO properties a bargain?
It is occasionally believed that any foreclosure must be a bargain and an opportunity for guaranteed profit. This often isn't true. You have to be cautious about buying a repossession if your intent is to make money off of it. While it's true that the bank is often eager 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 homes 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, however there are also many REOs that are not good buys and may not be money makers.
All set to make an offer?
Since banks typically sell REO properties "As Is", you'll want to be sure and 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, your offer may be more attractive if you can include documentation of your ability to pay, such as a pre-approval letter from a lender.
After you've made your offer, you can expect the bank to respond with a counter offer. From there it will be your decision whether to accept their counter, or submit another counter offer. Your deal could be final in one day, but that's usually not the case. Since offers and counter offers usually allow a day or more for the each party to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer.
If you have any questions on any of the above information, don't hesitate to call, text or email me! One of the most important parts of your home search is choosing a Realtor that is knowledgeable in your local market, has the experience needed to get you into the home best suited for you and at the best terms, and is someone you feel comfortable with.
Licensed in the State of Oregon and Washington