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Buying REO property or a foreclosure in Sandy?
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Smart consumers will turn to a seasoned pro when considering a foreclosed property. If you have any questions regarding real estate in Sandy, Utah, call me or send me an e-mail. |
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What's an REO?"REO" is Real Estate Owned. These are homes which have completed the foreclosure process and are currently owned by the bank or mortgage company. This is unlike real estate up for foreclosure auction. 
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. The buyer must also be willing to pay with cash in hand. And on top of all that, you'll receive the property totally as is. That may include existing liens and even current occupants that may require expulsion.
A bank-owned property, on the other hand, is a more tidy and attractive option. The REO property did not find a buyer during foreclosure auction. The bank now owns it. The lender will attend to the elimination of tax liens, evict occupants if needed and generally prepare for the issuance of a title insurance policy to the buyer at closing.
Note 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 ordinarily requires sellers to disclose any defects of which they are informed. By hiring Principal Realty Group Utah, you can rest assured knowing all parties are fulfilling Utah state disclosure requirements.
Are REO properties a bargain in Sandy?It is frequently believed that any foreclosure must be a good buy and a possibility for guaranteed profit. This frequently isn't true. You have to be cautious about buying a REO if your intent is make money. Even though the bank is typically anxious to offload it fast, they are also looking to get as much as they can for it.
 When considering the value of REO property, 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 foreclosures. Still there are also many REOs that are not good buys and may lose money.
Ready 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 contract with a listing agent.
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 accepting 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 withdraw the offer if you find it. If, as a buyer, you can provide documentation showing your ability to pay, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This holds for any type of real estate offer.)
After you've submitted your offer, you can expect the bank to respond with a counter offer. At this point it will be your decision whether to accept their counter, or submit another counter offer. Be aware, you'll be contending with a process that generally involves several people at the bank, and they don't work evenings or weekends. It's typical for there to be days or even weeks of negotiating back and forth. Principal Realty Group Utah is accustomed to these situations and will work to ensure there are no unnecessary delays.
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