Interested in REO property or a foreclosure in Big Lake?

What is an REO?

"REO" or Real Estate Owned are homes which have completed the foreclosure process that the bank or mortgage company presently owns. 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. You must also be ready to pay with cash in hand. And on top of all that, you'll receive the property entirely as is. That may comprise of prevailing liens and even current denizens that need to be evicted.

A bank-owned property, on the other hand, is a more tidy and attractive deal. The REO property didn't find a buyer during foreclosure auction. The lender now owns it. The lender will take care of 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.

You should be aware that REOs may be exempt from standard disclosure requirements. For example, in Texas, it is optional for foreclosures to have a Property Disclosure Statement, a document that typically requires sellers to disclose any defects they are knowledgeable of. By hiring TransEra Realty, you can rest assured knowing all parties are fulfilling Minnesota state disclosure requirements.

Is REO property in Big Lake a bargain?

It's occasionally believed that any REO must be a bargain and a possibility for guaranteed profit. This often isn't true. You have to be very careful about buying a repossession if your intent is to profit from the sale. While it's true that the bank is typically eager to sell it quickly, they are also looking to minimize any losses.

Look closely 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 remodeling 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 lose money.

Ready to make an offer?

Most banks 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 usually use 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 concerning the condition of the property and what their process is for accepting offers. Since banks almost always 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 retract the offer if you find it. As with making any offer on real estate, providing documentation proving your ability to secure financing may make your offer more attractive, such as a pre-approval letter from a lender.

Once you've submitted your offer, it's customary for the bank to respond with a counter offer. Then it will be your choice whether to accept their counter, or offer a counter to the counter offer. Be aware, you'll be working with a process that probably involves a group of people at the bank, and they don't work evenings or weekends. It's not uncommon for the process of offers and counter offers to take days or even weeks. TransEra Realty is accustomed to these situations and will work to ensure there are no undue delays.