BUYING FORECLOSURES & REO’S
Looking for REO property or a foreclosure in Pasadena?
What is an REO?
"REO" or Real Estate Owned are homes which have completed the foreclosure process and are presently held by the bank or mortgage company. 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 amassed during the foreclosure process. The buyer must also be willing to pay with cash in hand. Finally, you'll get the property completely as is. That might comprise of current liens and even current denizens that need to be evicted.
You should be aware that REOs may be exempt from typical disclosure requirements. For example, in Nevada, it is optional for foreclosures to have a Property Disclosure Statement, a document that normally requires sellers to disclose any defects they are aware of. By hiring Castle and Home Realtors, you can rest assured knowing all parties are fulfilling California state disclosure requirements.
Is REO property in Pasadena a bargain?
It's frequently presumed that any foreclosure must be a good buy and a possibility for guaranteed profit. This isn't necessarily the case. You have to be very careful about buying a repossession if your intent is make a profit. Even though the bank is usually eager to sell it quickly, they are also looking to get as much as they can for it. Look carefully at the listing and sales prices of similar homes in the neighborhood when making an offer on an REO. And factor in any repairs or upgrades necessary to prepare the house for resale or moving in. There are bargains with potential to make money, and many people do very well flipping 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 banks have a department dedicated to REO that you'll work with while buying
REO property from them. To get their properties advertised on the local MLS, the
lender will often use a listing agent. 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 about the condition of the property and what their
process is for receiving offers. Since banks most commonly 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 terminate the offer if
you find it. As with making any offer on real estate, providing documentation of
your ability to pay may make your offer more attractive, such as a pre-
Once you've submitted your offer, it's customary for the bank to make a counter offer. From there it will be up to you to decide whether to accept their counter, or offer a counter to the counter offer. Be aware, you'll be contending with a process that most likely involves a group of people at the bank, and they don't work evenings or weekends. It's not unusual for the process of offers and counter offers to take days or even weeks. Castle and Home Realtors is accustomed to these situations and will work to ensure there are no undue delays.