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Interested in REO property or a foreclosure in Oakland?
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Foreclosed upon and bank owned property purchases require the assistance of an experience professional.
If you have any questions regarding real estate in Oakland, California, call me or send me an e-mail.
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What is an REO?
"REO" or Real Estate Owned are homes which have completed the foreclosure process and are now owned by the bank or mortgage company. This is different than a property up for foreclosure auction.
When buying 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. Finally, you'll accept the property entirely as is. That could include standing liens and even current tenants that need to be kicked out.
A bank-owned property, on the other hand, is a more tidy and attractive deal. The REO property was unable to find a buyer during foreclosure auction. Now the bank owns it. The lender will see to 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 normally requires sellers to reveal any defects of which they are knowledgeable.
By hiring Seville Real Estate, you can rest assured knowing all parties are fulfilling California state disclosure requirements.
Are REO properties a bargain in Oakland?
It is commonly thought that any REO must be a good buy and a chance for easy money. This isn't necessarily the case. You have to be cautious about buying a repossession if your intent is make a profit. Even though the bank is often anxious to offload it quickly, they are also motivated to minimize any losses.
Look carefully at the listing and sales prices of competing properties in the neighborhood when making an offer on 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 may lose money.
Time to make an offer?
Most mortgage companies have staff dedicated to REO that you'll work with while 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 discover 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 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 hidden damage and cancel 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.
After you've presented your offer, it's customary for the bank to counter offer. From there it will be your choice whether to accept their counter, or make another counter offer.
Be aware, you'll be dealing with a process that probably involves several people at the bank, and they don't work evenings or weekends. It's quite common for there to be days or even weeks of negotiating back and forth. Seville Real Estate 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.
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