Making an offer on REO property or a foreclosure in Las Vegas?
Just as with any home purchase, your wisest move is to hire a professional real estate agent.
For more information, you can contact us
through our site or e-mail us
. We're glad to answer questions you have regarding real estate foreclosures.
What's an REO?
"REO" stands for Real Estate Owned. These are houses which have completed the foreclosure process that the bank or mortgage company presently possesses. 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 added during the foreclosure process. The buyer must also be willing to pay with cash in hand. Finally, you'll get the property totally as is. That possibly may comprise of current liens and even current tenants that need to be removed.
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 bank now owns it. The lender will see to the removal of tax liens, evict occupants if needed and generally plan 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 usually requires sellers to disclose any defects of which they are informed.
By hiring Nia Young, you can rest assured knowing all parties are fulfilling Nevada state disclosure requirements.
Is REO property in Las Vegas a bargain?
It is sometimes believed that any foreclosure must be a good buy and a chance for guaranteed profit. This isn't necessarily true. You have to be prudent 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 sell it quickly, they are also motivated to minimize any losses.
When contemplating the value of a foreclosure, carefully analyze 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.
There are bargains with potential to make money, and many people do very well buying and selling foreclosures. However, there are also many REOs that are not good buys and may not be money makers.
Time to make an offer?
Most mortgage companies have staff 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 find out as much as you can about their knowledge regarding the condition of the property and what their process is for receiving offers. Since banks typically sell REO properties "as is", you may want to include an inspection contingency in your offer that gives you time to check for unknown damage and terminate the offer if you find it.
As with making any offer on real estate, you'll make your offer more attractive if you can include documentation of your ability to pay, such as a pre-approval letter from a lender.
Once you've presented your offer, it's customary for the bank to make a counter offer. From there it will be up to you to decide whether to accept their counter, or make another counter offer.
Your deal might be final in a single day, but that's usually not the case. 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.