Buying REO property or a foreclosure in San Diego?


	Investing in a bank-owned property is not something to be taken lightly.

What's an REO?

"REO" or Real Estate Owned are houses which have gone through foreclosure and are currently possessed by the bank or mortgage company. This is unlike a property up for foreclosure auction. Cityfied Realty Inc. #01887664 has experience to share with foreclosures and bank owned properties in San Diego, California

Cityfied Realty Inc. #01887664 has experience to share with foreclosures and bank owned properties in San Diego, California

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 willing to pay with cash in hand. Finally, you'll receive the property entirely as is. That could include existing liens and even current tenants that may require eviction.

A bank-owned property, by contrast, is a much neater and attractive option. The REO property didn't find a buyer during foreclosure auction. The lender now owns it. The lender will handle 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 instance, in California, banks are not required to give a Transfer Disclosure Statement, a document that normally requires sellers to reveal any defects they are informed of. By hiring Cityfied Realty Inc. #01887664, you can rest assured knowing all parties are fulfilling California state disclosure requirements.

Are REO properties a bargain in San Diego?

It is occasionally assumed that any foreclosure must be a good buy and a chance for easy money. This isn't necessarily true. You have to be very careful about buying a repossession if your intent is make a profit. Even though the bank is typically anxious to sell it promptly, they are also motivated to minimize any losses.

Cityfied Realty Inc. #01887664 has experience to share with foreclosures and bank owned properties in San Diego, California

Look closely at the listing and sales prices of comparable 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. There are bargains with potential to make money, and many people do very well buying and selling foreclosures. But there are also many REOs that are not good buys and may lose money.

Time to make an offer?

Most banks have a department dedicated to REO that you'll work with while buying REO property from them. To get their properties advertised on the local MLS, the lender will usually hire a listing agent.

Before 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 regarding the condition of the property and what their process is for taking offers. Since banks most commonly 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 unknown damage and retract 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 holds for any real estate offer.)

Once you've submitted your offer, you can expect the bank to respond with a counter offer. From there it will be your decision whether to accept their counter, or offer a counter to the counter offer. Your deal could be settled in a single day, but that's rare. Since offers and counter offers usually give the other party a day or longer to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer.

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