Interested in REO property or a foreclosure in Albuquerque?
Foreclosed upon and bank owned property purchases require the assistance of an experience professional. For more information, you can contact me
through my site or e-mail me
. I'm happy to answer questions you have about real estate foreclosures.
What's an REO?
"REO" stands for Real Estate Owned. These are homes which have been through foreclosure that the bank or mortgage company currently possesses. This is different than real estate 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. The buyer must also be willing to pay with cash in hand. To top everything off, you'll accept the property completely as is. That might include standing liens and even current residents that may require expulsion.
A bank-owned property, on the contrary, is a much cleaner and attractive transaction. The REO property was unable to find a buyer during foreclosure auction. Now the bank owns it. The lender will deal with 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.
Note that REOs may be exempt from standard disclosure requirements. For example, in Texas, it is optional for foreclosures to have a Property Disclosure Statement, a document that ordinarily requires sellers to tell you about any defects they are informed of. By hiring Qmetro Realtors Inc, you can rest assured knowing all parties are fulfilling New Mexico state disclosure requirements.
Are REO properties a bargain in Albuquerque?
It is commonly presumed that any foreclosure must be a good deal and a possibility 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 usually eager to offload it soon, they are also motivated to get as much as they can for it.
Look carefully at the listing and sales prices of comparable properties in the neighborhood when considering the purchase of an REO. And factor in any repairs or remodeling necessary to prepare the house for resale or moving in. It is possible to find REOs with money-making potential, and many people do very well buying and selling foreclosures. Still, there are also many REOs that are not good buys and may not be money makers.
Time to make an offer?
Most lenders have a department 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 usually 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 accepting offers. Since banks usually sell REO properties "as is", you may want 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 demonstrating your ability to pay, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This goes for any type of real estate offer.)
Once you've submitted your offer, you can expect the bank to make 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 multiple people at the bank, and they don't work evenings or weekends. It's not unusual for there to be days or even weeks of going back and forth. Qmetro Realtors Inc is accustomed to these situations and will work to ensure there are no unnecessary delays.