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Purchasing REO property or a foreclosure in Manchester?
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Making an offer on a bank-owned property is not something to be taken lightly.
Should you have questions regarding real estate in Manchester, New Hampshire, call me or send me an e-mail.
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What's an REO?
"REO" is an abbreviation for Real Estate Owned. These are houses which have gone through foreclosure and are presently held by the bank or mortgage company. This differs from 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 amassed during the foreclosure process. The buyer must also be ready to pay with cash in hand. To top everything off, you'll accept the property 100% as is. That possibly may consist of existing liens and even current denizens that need to be expelled.
A bank-owned property, by contrast, is a much neater and attractive option. The REO property was unable to find a buyer during foreclosure auction. The bank now owns it. The bank will see to the removal of tax liens, evict occupants if needed and generally arrange 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 normally requires sellers to tell you about any defects they are informed of.
By hiring RE/MAX Omega Group, you can rest assured knowing all parties are fulfilling New Hampshire state disclosure requirements.
Is REO property in Manchester a bargain?
It's frequently believed that any REO must be a good deal and a possibility for guaranteed profit. This simply isn't true. You have to be cautious about buying a REO if your intent is profit from the sale. Even though the bank is usually eager to offload it soon, they are also motivated to minimize any losses.
Look carefully at the listing and sales prices of similar properties in the neighborhood when considering the purchase of an REO. And factor in any repairs or upgrades 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 flipping foreclosures. Still there are also many REOs that are not good buys and may not be money makers.
Ready to make an offer?
Most mortgage companies 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 frequently 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 find out 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 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 unseen damage and withdraw the offer if you find it.
As with making any offer on real estate, providing documentation showing your ability to pay may make your offer more attractive, such as a pre-approval letter from a lender.
After you've submitted your offer, it's customary for the bank to counter offer. From there it will be up to you to decide whether to accept their counter, or submit another counter offer.
Understand, you'll be working with a process that probably involves multiple people at the bank, and they don't work evenings or weekends. It's typical for the process of offers and counter offers to take days or even weeks. RE/MAX Omega Group 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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