Looking for REO property or a foreclosure in San Diego?
Purchasing a bank-owned property is not something to be taken casually.
What's an REO?
"REO" stands for Real Estate Owned. These are properties which have been through foreclosure that the bank or mortgage company now holds. This is not the same as 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 added during the foreclosure process. You must also be willing to pay with cash in hand. And on top of all that, you'll accept the property 100% as is. That could consist of standing liens and even current residents that need to be evicted.
A bank-owned property, on the other hand, is a much neater and attractive option. The REO property did not 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.
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 reveal any defects of which they are knowledgeable.
By hiring PHILIP ESTACIO, you can rest assured knowing all parties are fulfilling California state disclosure requirements.
Am I guaranteed a good deal when purchasing an REO property in San Diego?
It's sometimes thought that any REO must be a good deal and a chance for guaranteed profit. This isn't necessarily true. You have to be very careful about buying a repossession if your intent is to make money off of it. While it's true that the bank is often anxious to offload it promptly, they are also motivated to minimize any losses.
When contemplating 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 buying and selling foreclosures. However there are also many REOs that are not good buys and not likely to turn a profit.
Ready to make an offer?
Most lenders have staff 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 frequently contract with 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 about the condition of the property and what their process is for receiving offers. Since banks typically sell REO properties "as is", it's often prudent to include an inspection contingency in your offer that gives you time to check for unknown damage and terminate 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 presented your offer, it's customary for the bank to counter offer. At this point it will be up to you to decide whether to accept their counter, or make another counter offer.
Your deal could be final in a single day, but that's rare. Since offers and counter offers usually give the other party a day or longer to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer. PHILIP ESTACIO is are used to working around the schedules of this type of seller and will do everything possible to ensure there are no unnecessary delays.
PHILIP ESTACIO 9176 Mira Mesa Blvd. San Diego, CA 92126-4804
When contemplating 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 buying and selling foreclosures. However there are also many REOs that are not good buys and not likely to turn a profit.
