Making an offer on REO property or a foreclosure in Salinas?


	Just as with any property purchase, your wisest move is to hire a professional real estate agent. Should you have questions about real estate in Salinas, California, call me or send me an e-mail.

What's an REO?

"REO" is Real Estate Owned. These are houses which have completed the foreclosure process and are presently possessed by the bank or mortgage company. This is different than a property up for foreclosure auction. CENTURY 21 A Property Shoppe - Eisrael Gomez has experience to share with foreclosures and bank owned properties in Salinas, California

CENTURY 21 A Property Shoppe - Eisrael Gomez has experience to share with foreclosures and bank owned properties in Salinas, California

When buying 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 willing to pay with cash in hand. To top everything off, you'll receive the property 100% as is. That possibly may include prevailing liens and even current occupants that may require removal.

A bank-owned property, on the contrary, is a more tidy and attractive deal. The REO property did not find a buyer during foreclosure auction. The bank now owns it. The bank will handle 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.

Do be aware that REOs may be exempt from typical disclosure requirements. For example, in North Carolina, it is optional for foreclosures to have a Property Disclosure Statement, a document that normally requires sellers to make known any defects of which they are aware. By hiring CENTURY 21 A Property Shoppe - Eisrael Gomez, you can rest assured knowing all parties are fulfilling California state disclosure requirements.

Am I guaranteed a good deal when investing in a bank owned property in Salinas?

It is sometimes believed that any REO must be a good deal and a chance for guaranteed profit. This frequently isn't true. You have to be prudent about buying a REO if your intent is make money. Even though the bank is typically anxious to sell it fast, they are also looking to get as much as they can for it.

CENTURY 21 A Property Shoppe - Eisrael Gomez has experience to share with foreclosures and bank owned properties in Salinas, California

When considering the value of a foreclosure, you need to look closely at 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 not likely to turn a profit.

Time to make an offer?

Most mortgage companies 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 hire a listing agent.

Prior to 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 getting offers. Since banks almost always sell REO properties "as is", it may be in your best interest to include an inspection contingency in your offer that gives you time to check for hidden damage and withdraw 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.

After you've submitted your offer, you can expect the bank to respond with a counter offer. Then it will be up to you to decide whether to accept their counter, or offer a counter to the counter offer. Understand, you'll be working with a process that most likely involves a group of people at the bank, and they don't work evenings or weekends. It's typical for the process of offers and counter offers to take days or even weeks. CENTURY 21 A Property Shoppe - Eisrael Gomez 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.