Interested in Buying
REO or Foreclosure Property in Pinehurst?
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Transaction What is an REO?
"REO" is short for Real Estate Owned. These are properties which have gone through foreclosure and are currently possessed by the bank or mortgage company. This is unlike 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 amassed during the foreclosure process. The buyer must also be able to pay with cash in hand. And on top of all that, you'll receive the property completely as is. That possibly could include existing liens and even current denizens that may require expulsion.
A bank-owned property, by contrast, is a more tidy and attractive transaction. The REO property did not find a buyer during foreclosure auction. The lender now owns it. The lender will take care of the elimination of tax liens, evict occupants if needed and generally arrange for the issuance of a title insurance policy to the buyer at closing.
You should be aware that REOs may be exempt from standard 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 me, you can rest assured knowing all parties are fulfilling North Carolina state disclosure requirements.
Are REO Properties a Bargain in Pinehurst?
It is frequently assumed that any REO must be a good deal and a possibility for easy money. This isn't always true. You have to be cautious about buying a repossession if your intent is to make a profit. Even though the bank is usually anxious to sell it quickly, they are also looking to get as much as they can for it.
When pondering the value of a foreclosure, carefully analyze 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.
It is possible to find REOs with money-making potential, 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.
Prepared to Make an Offer?
Most lenders have staff dedicated to REO that you'll work with in buying REO property from them. To get their properties advertised on the local MLS, the lender will typically use a listing agent.
Before making your offer, you'll want to contact either the listing agent or REO department at the bank and learn as much as you can about their knowledge concerning the condition of the property and what their process is for taking offers. Since banks usually 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.
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 is generally true for any real estate offer.)
After you've presented your offer, you can expect the bank to make a counter offer. At this point it will be up to you to decide whether to accept their counter, or submit another counter offer.
Be aware, you'll be dealing with a process that probably involves several people at the bank, and they don't work evenings or weekends. It's quite common for the process of offers and counter offers to take days or even weeks. I am is used to working around the schedules of this type of seller and will do everything possible to ensure there are no undue delays.