Making an offer on REO property or a foreclosure in Cupertino?
Foreclosed upon and bank owned property purchases require the assistance of an experience professional.
For more information, just contact me
through my site or e-mail me
. I'm happy to answer any questions you have regarding real estate foreclosures.
What is an REO?
"REO" or Real Estate Owned are houses which have completed the foreclosure process and are presently held by the bank or mortgage company. This differs from 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 100% as is. That possibly may include prevailing liens and even current denizens that need to be removed.
A bank-owned property, on the contrary, is a much cleaner and attractive deal. The REO property was unable to find a buyer during foreclosure auction. Now the lender owns it. The bank will see to the elimination of tax liens, evict occupants if needed and generally plan for the issuance of a title insurance policy to the buyer at closing.
Do be aware that REOs may be exempt from normal disclosure requirements.
For example, in Nevada, it is optional for foreclosures to have a Property Disclosure Statement,
a document that normally requires sellers to reveal any defects of which they are aware.
By hiring Mikasa Homes & Funding, you can rest assured knowing all parties are fulfilling California state disclosure requirements.
Are REO properties a bargain in Cupertino?
It's sometimes thought that any REO must be a bargain and an opportunity for guaranteed profit. This isn't necessarily the case. You have to be very careful about buying a REO if your intent is to make money. While it's true that the bank is often eager to sell it soon, they are also looking to minimize any losses.
Look carefully at the listing and sales prices of competing 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.
The bargains with money making potential exist, and many people do very well flipping foreclosures. But, there are also many REOs that are not good buys and may not be money makers.
Time 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 often 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 their knowledge concerning the condition of the property and what their process is for taking offers. Since banks almost always sell REO properties "as is", it's often prudent to include an inspection contingency in your offer that gives you time to check for unseen damage and withdraw the offer if you find it.
If, as a buyer, you can provide documentation proving 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 is generally true for any type of real estate offer.)
After you've presented your offer, you can expect the bank to make a counter offer. From there it will be your choice whether to accept their counter, or offer a counter to the counter offer.
Realize, you'll be dealing with a process that probably involves multiple people at the bank, and they don't work evenings or weekends. It's quite common for there to be days or even weeks of going back and forth. Mikasa Homes & Funding is used to working around the schedules of this type of seller and will do everything possible to ensure there are no unnecessary delays.