Looking for REO property or a foreclosure in San Rafael?
Just as with any home purchase, your wisest move is to hire a professional real estate agent.
What is an REO?
"REO" stands for Real Estate Owned. These are properties which have been foreclosed upon that the bank or mortgage company now holds. This is not the same as 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. The buyer must also be willing to pay with cash in hand. Finally, you'll get the property completely as is. That possibly will consist of current liens and even current occupants that need to be put out.
A bank-owned property, on the contrary, is a more tidy and attractive proposition. The REO property was unable to find a buyer during foreclosure auction. Now the lender owns it. The bank will take care of 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.
Take notice that REOs may be exempt from standard disclosure requirements.
For instance, in California, banks are not required to give a Transfer Disclosure Statement,
a document that normally requires sellers to tell you about any defects of which they are aware.
By hiring Marin Realty Experts, you can rest assured knowing all parties are fulfilling California state disclosure requirements.
Am I assured a bargain when investing in an REO property in San Rafael?
It's commonly presumed that any foreclosure must be a steal and an opportunity for guaranteed profit. This frequently isn't true. You have to be cautious about buying a REO if your intent is to make money. While it's true that the bank is typically anxious to sell it promptly, they are also looking to get as much as they can for it.
Look carefully at the listing and sales prices of comparable 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.
The bargains with money making potential exist, and many people do very well buying foreclosures. Still, there are also many REOs that are not good buys and may not be money makers.
All set to make an offer?
Most banks 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.
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 concerning the condition of the property and what their process is for accepting offers. Since banks typically sell REO properties "as is", it's often prudent 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 showing 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 decision whether to accept their counter, or offer a counter to the counter offer.
Understand, you'll be working with a process that generally involves multiple people at the bank, and they don't work evenings or weekends. It's quite common for the process of offers and counter offers to take days or even weeks. Marin Realty Experts is accustomed to these situations and will work to ensure there are no undue delays.