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Buying REO property or a foreclosure in Bronx?
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Just as with any home purchase, your smartest move is to hire a professional real estate agent. |
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What is an REO?"REO" stands for Real Estate Owned. These are houses which have been foreclosed upon and are now owned 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. And on top of all that, you'll get the property totally as is. That could comprise of existing liens and even current occupants that need to be evicted.
A bank-owned property, conversely, is a more tidy and attractive proposition. The REO property did not find a buyer during foreclosure auction. The bank now owns it. The bank will see to the elimination of tax liens, evict occupants if needed and generally plan for the issuance of a title insurance policy to the buyer at closing.
Note 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 ordinarily requires sellers to disclose any defects of which they are informed. By hiring RICHARD GRECO REAL ESTATE, you can rest assured knowing all parties are fulfilling New York state disclosure requirements.
Is REO property in Bronx a bargain?It's sometimes believed that any foreclosure must be a good buy and an opportunity for easy money. This frequently isn't true. You have to be very careful about buying a REO if your intent is make a profit. Even though the bank is often anxious to offload it soon, they are also looking to get as much as they can for it.
 When considering the value of REO property, you need to look closely at 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 flipping foreclosures. Still there are also many REOs that are not good buys and may lose money.
Prepared to make an offer?Most lenders have a department dedicated to REO that you'll work with in buying REO property from them. To get their properties advertised on the local MLS, the lender will often hire 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 their knowledge regarding the condition of the property and what their process is for accepting offers. Since banks almost always sell REO properties "as is", you may want to include an inspection contingency in your offer that gives you time to check for hidden damage and retract the offer if you find it. If, as a buyer, you can provide documentation showing your ability to pay, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This is generally true for any real estate offer.)
After you've submitted your offer, you can expect the bank to counter offer. From there it will be up to you to decide whether to accept their counter, or make another counter offer. Be aware, you'll be contending with a process that most likely involves multiple 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. RICHARD GRECO 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 undue delays.
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