Making an offer on REO property or a foreclosure in North Myrtle Beach?
Just as with any home purchase, your wisest move is to hire a professional real estate agent. Should you have questions regarding real estate in North Myrtle Beach, South Carolina, call me or send me an e-mail.
What is an REO?
"REO" or Real Estate Owned are homes which have been through foreclosure that the bank or mortgage company currently possesses. 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 added during the foreclosure process. The buyer must also be willing to pay with cash in hand. To top everything off, you'll receive the property entirely as is. That might comprise of current liens and even current residents that may require expulsion.
A bank-owned property, conversely, is a much neater and attractive deal. The REO property was unable to find a buyer during foreclosure auction. Now the bank owns it. The bank will handle the elimination of tax liens, evict occupants if needed and generally organize for the issuance of a title insurance policy to the buyer at closing.
Do be aware that REOs may be exempt from typical disclosure requirements. For instance, in California, banks are not required to give a Transfer Disclosure Statement, a document that typically requires sellers to disclose any defects they are informed of. By hiring Buyers' Choice Realty, you can rest assured knowing all parties are fulfilling South Carolina state disclosure requirements.
Is REO property in North Myrtle Beach a bargain?
It is frequently presumed that any REO must be a good buy and a chance for guaranteed profit. This frequently isn't true. You have to be cautious about buying a repossession if your intent is make a profit. Even though the bank is typically anxious to offload it promptly, they are also motivated to minimize any losses.
When considering what to pay for REO property, 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 and selling foreclosures. Still 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 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 find out as much as you can about what they know regarding the condition of the property and what their process is for receiving offers. Since banks typically 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 unknown damage and retract 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 presented 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 make another counter offer. Your deal could be final in a single day, but that's usually not the case. 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. Buyers' Choice Realty 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.
When considering what to pay for REO property, 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 and selling foreclosures. Still there are also many REOs that are not good buys and may not be money makers.
