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Purchasing REO property or a foreclosure in Corpus Christi?
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Smart consumers will turn to a seasoned pro when considering a foreclosed property.
Should you have any questions regarding real estate in Corpus Christi, Texas, call me or send me an e-mail.
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What is an REO?
"REO" means Real Estate Owned. These are properties which have been through foreclosure that the bank or mortgage company presently holds. This is unlike a property up for foreclosure auction.
If you buy a property during a foreclosure sale, you must pay at least the loan balance plus any interest and other fees accumulated during the foreclosure process. You must also be ready to pay with cash in hand. And on top of all that, you'll accept the property 100% as is. That possibly may involve current liens and even current tenants that may require eviction.
A bank-owned property, on the other hand, is a much cleaner and attractive proposition. The REO property did not find a buyer during foreclosure auction. Now the bank owns it. The bank will see to the elimination of tax liens, evict occupants if needed and generally arrange for the issuance of a title insurance policy to the buyer at closing.
Note that REOs may be exempt from standard disclosure requirements.
For example, in California, banks do not have to give a Transfer Disclosure Statement,
a document that typically requires sellers to make known any defects of which they are knowledgeable.
By hiring The Village Realty, you can rest assured knowing all parties are fulfilling Texas state disclosure requirements.
Is REO property in Corpus Christi a bargain?
It's commonly thought that any REO must be a good buy and an opportunity for guaranteed profit. This isn't always true. You have to be cautious about buying a REO if your intent is make money. Even though the bank is often eager to sell it promptly, they are also motivated to minimize any losses.
Look carefully at the listing and sales prices of similar homes in the neighborhood when making an offer on an REO. And factor in any repairs or remodeling necessary to prepare the house for resale or moving in.
There are bargains with potential to make money, 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 lenders have staff dedicated to REO that you'll work with while 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 learn as much as you can about their knowledge regarding 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 hidden damage and terminate the offer if you find it.
If, as a buyer, you can provide documentation showing 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. Then it will be your decision whether to accept their counter, or make another counter offer.
Your transaction could be settled 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. The Village Realty is accustomed to these situations and will work to ensure there are no undue delays.
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