Buying REO property or a foreclosure in Lawrence?

Foreclosed upon and bank owned property purchases require the assistance of an experience professional. For more information, you can contact us through my site or e-mail me. I'm happy to answer questions you have regarding real estate foreclosures.

What is an REO?

"REO" or Real Estate Owned are properties which have completed the foreclosure process that the bank or mortgage company currently owns. This differs from a property up for foreclosure auction. Miller & Midyett Real Estate has experience to share with foreclosures and bank owned properties in Lawrence, Kansas

When buying a property during a foreclosure sale, you must pay at least the loan balance plus any interest and other fees accrued during the foreclosure process. The buyer must also be prepared to pay with cash in hand. Finally, you'll receive the property entirely as is. That possibly could consist of prevailing liens and even current tenants that need to be removed.

A bank-owned property, by contrast, is a more tidy and attractive transaction. The REO property did not find a buyer during foreclosure auction. The lender now owns it. The bank will handle 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.

Note that REOs may be exempt from normal disclosure requirements. In California, for example, banks are exempt from giving a Transfer Disclosure Statement, a document that typically requires sellers to disclose any defects of which they are aware. By hiring Miller & Midyett Real Estate, you can rest assured knowing all parties are fulfilling Kansas state disclosure requirements.

Are REO properties a bargain in Douglas County?

It's commonly presumed that any REO must be a steal and a chance for easy money. This frequently isn't true. You have to be prudent about buying a REO if your intent is profit from the sale. While it's true that the bank is often eager to sell it soon, they are also motivated to get as much as they can for it.

Miller & Midyett Real Estate has experience to share with foreclosures and bank owned properties in Lawrence, Kansas When contemplating the value of REO property, 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. The bargains with money making potential exist, and many people do very well flipping foreclosures. But there are also many REOs that are not good buys and not likely to turn a profit.

Prepared 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 typically hire a listing agent.

Before making your offer, we will want to contact either the listing agent or REO department at the bank and discover as much as we can about what they know about the condition of the property and what their process is for receiving offers. Since banks typically 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 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 presented your offer, it's customary for the bank to respond with a 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 dealing with a process that generally 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.

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