Interested in REO property or a foreclosure in Redondo Beach, Hermosa Beach, Manhattan Beach, Torrance, Lomita, Palos Verdes, Rancho Palos Verdes, Rolling Hills Estates and San Pedro? Jack will guide you!
Foreclosed upon and bank owned property purchases require the assistance of an experience professional. Should you have any questions about real estate in Redondo Beach, California, call me or send me an e-mail.
What is an REO?
"REO" means Real Estate Owned. These are homes which have completed the foreclosure process that the bank or mortgage company currently holds. This is unlike real estate 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 amassed during the foreclosure process. You must also be able to pay with cash in hand. Finally, you'll receive the property 100% as is. That possibly may comprise of existing liens and even current denizens that need to be put out.
A bank-owned property, on the contrary, is a much neater and attractive option. The REO property didn't find a buyer during foreclosure auction. The lender now owns it. The bank will deal with the elimination of tax liens, evict occupants if needed and generally arrange for the issuance of a title insurance policy to the buyer at closing.
Do be aware that REOs may be exempt from normal disclosure requirements. For example, in California, banks do not have to give a Transfer Disclosure Statement, a document that typically requires sellers to disclose any defects of which they are aware. By hiring Jack McSweeney DRE#1027223 - RE/MAX Execs, you can rest assured knowing all parties are fulfilling California state disclosure requirements.
Is REO property in Redondo Beach a bargain? Depends..
It is frequently believed that any foreclosure must be a steal and a possibility for guaranteed profit. This isn't always the case. You have to be prudent about buying a REO if your intent is to make money off of it. While it's true that the bank is usually eager to sell it fast, they are also looking to minimize any losses.
When considering 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 foreclosures. However there are also many REOs that are not good buys and not likely to turn a profit.
Prepared to make an offer?
Most banks have staff dedicated to REO that you'll work with in buying REO property from them. Normally 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 discover as much as you can about what they know about the condition of the property and what their process is for taking offers. Since banks almost always 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. If, as a buyer, you can provide documentation demonstrating your ability to pay, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This holds for any type of real estate offer.)
After you've presented your offer, it's customary for the bank to respond with a counter offer. Then it will be up to you to decide whether to accept their counter, or make another counter offer. Realize, you'll be working with a process that usually involves several people at the bank, and they don't work evenings or weekends. It's not uncommon for there to be days or even weeks of going back and forth. Jack McSweeney DRE#1027223 - RE/MAX Execs is accustomed to these situations and will work to ensure there are no unnecessary delays.
Jack McSweeney DRE#1027223 - RE/MAX Execs 1720 S Elena Ave Redondo Beach, CA 90277-5705
When considering 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 foreclosures. However there are also many REOs that are not good buys and not likely to turn a profit.
