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Purchasing REO property or a foreclosure in Leesburg?
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Smart consumers will turn to a seasoned pro when considering the purchase of a foreclosed property. If you have questions about real estate in Leesburg, Virginia, call me or send me an e-mail. |
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What's an REO?"REO" or Real Estate Owned are homes which have completed the foreclosure process that the bank or mortgage company now possesses. This is different than 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 accrued during the foreclosure process. You must also be ready to pay with cash in hand. Finally, you'll accept the property 100% as is. That possibly could include standing liens and even current denizens that may require eviction.
A bank-owned property, on the other hand, is a more tidy and attractive deal. The REO property did not find a buyer during foreclosure auction. Now the bank owns it. The bank will take care of the removal of tax liens, evict occupants if needed and generally prepare 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 example, in North Carolina, it is optional for foreclosures to have a Property Disclosure Statement, a document that typically requires sellers to reveal any defects of which they are knowledgeable. By hiring Robin Short, you can rest assured knowing all parties are fulfilling Virginia state disclosure requirements.
Are REO properties a bargain in Leesburg?It's sometimes assumed that any foreclosure must be a steal and an opportunity for easy money. This simply isn't true. You have to be prudent about buying a repossession if your intent is to make money off of it. Even though the bank is often eager to offload it soon, they are also motivated to get as much as they can for it.
 When contemplating what to pay for 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. The bargains with money making potential exist, and many people do very well buying foreclosures. However there are also many REOs that are not good buys and may not be money makers.
Ready to make an offer?Most lenders have a department 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.
Prior to 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 what they know concerning the condition of the property and what their process is for taking offers. Since banks most commonly 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 unknown damage and cancel the offer if you find it. As with making any offer on real estate, providing documentation proving your ability to pay may make your offer more attractive, such as a pre-approval letter from a lender.
After you've made your offer, it's customary for the bank to respond with a counter offer. Then it will be your decision whether to accept their counter, or submit another counter offer. Realize, you'll be working with a process that most likely involves a group of 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. Robin Short is are used to working around the schedules of this type of seller and will do everything possible to ensure there are no undue delays.
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