Looking for REO property or a foreclosure in Williamsburg?
Just as with any property purchase, your smartest move is to hire a professional real estate agent.
What's an REO?
"REO" or Real Estate Owned are houses which have gone through foreclosure that the bank or mortgage company now owns. 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 added during the foreclosure process. The buyer must also be ready to pay with cash in hand. And on top of all that, you'll accept the property entirely as is. That possibly may consist of existing liens and even current occupants that need to be thrown out.
A bank-owned property, by contrast, is a much neater and attractive proposition. The REO property didn't find a buyer during foreclosure auction. Now the bank owns it. The lender will attend to the removal of tax liens, evict occupants if needed and generally plan 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 example, in Nevada, it is optional for foreclosures to have a Property Disclosure Statement,
a document that ordinarily requires sellers to tell you about any defects they are aware of.
By hiring RE/MAX Peninsula at New Town, you can rest assured knowing all parties are fulfilling Virginia state disclosure requirements.
Is REO property in Williamsburg a bargain?
It's frequently assumed that any foreclosure must be a steal and a possibility for easy money. This simply isn't true. You have to be very careful about buying a REO if your intent is to profit from the sale. Even though the bank is often anxious to offload it quickly, they are also looking to minimize any losses.
When considering what to pay for 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.
There are bargains with potential to make money, and many people do very well buying and selling foreclosures. Still, there are also many REOs that are not good buys and may lose money.
All set to make an offer?
Most lenders have a department 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 learn as much as you can about what they know about the condition of the property and what their process is for getting 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 unseen damage and terminate 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 is generally true for any type of real estate offer.)
Once you've made your offer, you can expect the bank to counter offer. At this point it will be your choice whether to accept their counter, or make another counter offer.
Understand, you'll be contending with a process that generally involves a group of people at the bank, and they don't work evenings or weekends. It's not unusual for there to be days or even weeks of negotiating back and forth. RE/MAX Peninsula at New Town is used to working around the schedules of this type of seller and will do everything possible to ensure there are no undue delays.