Interested in REO property or a foreclosure in Puyallup?
Foreclosed upon and bank owned property purchases require the assistance of an experience professional.
Should you have questions regarding real estate in Puyallup, Washington, call me or send me an e-mail.
What is an REO?
"REO" is short for Real Estate Owned. These are properties which have completed the foreclosure process that the bank or mortgage company now possesses. 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. You must also be ready to pay with cash in hand. To top everything off, you'll accept the property entirely as is. That possibly could consist of standing liens and even current residents that need to be expelled.
A bank-owned property, on the other hand, is a much neater and attractive deal. The REO property was unable to find a buyer during foreclosure auction. Now the lender owns it. The bank will deal with 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.
Take notice that REOs may be exempt from typical disclosure requirements.
For instance, in California, banks do not have to give a Transfer Disclosure Statement,
a document that typically requires sellers to tell you about any defects they are informed of.
By hiring Trey Affolter, Keller Williams Realty, you can rest assured knowing all parties are fulfilling Washington state disclosure requirements.
Am I guaranteed a low price when purchasing a bank owned property in Puyallup?
It's sometimes assumed that any foreclosure must be a steal and a chance for guaranteed profit. This often isn't true. You have to be prudent about buying a REO if your intent is make a profit. While it's true that the bank is often anxious to offload it fast, they are also motivated to get as much as they can for it.
When contemplating 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 flipping foreclosures. However there are also many REOs that are not good buys and may not be money makers.
All set to make an offer?
Most lenders have staff dedicated to REO that you'll work with when buying REO property from them. Commonly 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 discover as much as you can about what they know regarding the condition of the property and what their process is for accepting offers. Since banks most commonly 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 cancel the offer if you find it.
As with making any offer on real estate, providing documentation showing your ability to secure financing may make your offer more attractive, such as a pre-approval letter from a lender.
After you've submitted your offer, it's customary for the bank to respond with a counter offer. At this point it will be up to you to decide whether to accept their counter, or make another counter offer.
Be aware, you'll be working with a process that generally involves a group of people at the bank, and they don't work evenings or weekends. It's not uncommon for the process of offers and counter offers to take days or even weeks. Trey Affolter, Keller Williams Realty is accustomed to these situations and will work to ensure there are no unnecessary delays.
When contemplating 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 flipping foreclosures. However there are also many REOs that are not good buys and may not be money makers.
