Interested in REO property or a foreclosure in Port Aransas?

	Foreclosed upon and bank owned property purchases require the assistance of an experience professional.

What is an REO?

"REO" stands for Real Estate Owned. These are homes which have completed the foreclosure process and are now owned by the bank or mortgage company. This is unlike 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 amassed during the foreclosure process. You must also be prepared to pay with cash in hand. To top everything off, you'll get the property 100% as is. That possibly may involve standing liens and even current occupants that may require expulsion.

A bank-owned property, by contrast, is a much cleaner and attractive transaction. The REO property was unable to find a buyer during foreclosure auction. Now the lender owns it. The lender will take care of the removal of tax liens, evict occupants if needed and generally organize 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 usually requires sellers to tell you about any defects of which they are informed. By hiring Coldwell Banker Island, Realtors, you can rest assured knowing all parties are fulfilling Texas state disclosure requirements.

Are REO properties a bargain in Port Aransas?

It's occasionally thought that any REO must be a good buy and a possibility for guaranteed profit. This often isn't true. You have to be cautious about buying a repossession if your intent is profit from the sale. Even though the bank is usually anxious to offload it soon, they are also looking to get as much as they can for it.

Look carefully at the listing and sales prices of comparable homes 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 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 lenders have a department dedicated to REO that you'll work with while buying REO property from them. Normally the REO department will use a listing agent to get their REO properties listed on the local MLS.

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 receiving offers. Since banks typically sell REO properties "as is", you'll want to be sure and include an inspection contingency in your offer that gives you time to check for unseen damage and terminate the offer if you find it. As with making any offer on real estate, providing documentation proving your ability to secure financing may make your offer more attractive, such as a pre-approval letter from a lender.

Once you've submitted your offer, it's customary for the bank to respond with a counter offer. From there it will be up to you to decide whether to accept their counter, or submit another counter offer. Your transaction could be final in a single day, but that's rare. Since offers and counter offers usually allow a day or more for the other party to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer.

Coldwell Banker Island, Realtors
Office: (361) 749-6000 | Fax: (361) 749-5337
1900 State Highway 361 | Port Aransas | TX 78373-4894