You just located Mid Maryland's #1 REO Brokerage, we represent MANY Banks & can find you the BEST DEAL.
Savvy consumers will turn to a seasoned pro when considering a foreclosed property.
Should you have questions regarding real estate in Mid Maryland, call us
or send us an e-mail
What's an REO?
"REO" is an abbreviation for Real Estate Owned. These are homes which have been foreclosed upon that the bank or mortgage company currently possesses. 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. You must also be able to pay with cash in hand. To top everything off, you'll receive the property totally as is. That possibly may comprise of standing liens and even current residents that need to be thrown out.
A bank-owned property, by contrast, is a more tidy and attractive transaction. The REO property was unable to find a buyer during foreclosure auction. The bank now owns it. The bank will attend to 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.
You should be aware that REOs may be exempt from typical disclosure requirements.
For example, in Texas, it is optional for foreclosures to have a Property Disclosure Statement,
a document that typically requires sellers to reveal any defects they are knowledgeable of.
By hiring Precise Real Estate & Dev & Dev, you can rest assured knowing all parties are fulfilling Maryland state disclosure requirements.
Am I guaranteed a bargain when purchasing an REO property?
It's commonly presumed that any REO must be a good buy and an opportunity 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. While it's true that the bank is usually anxious to sell it promptly, they are also motivated to get as much as they can for it.
When considering the value of 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.
It is possible to find REOs with money-making potential, and many people do very well buying and selling foreclosures. However, there are also many REOs that are not good buys and not likely to turn a profit.
Time to make an offer?
Most mortgage companies have a department dedicated to REO that you'll work with in buying REO property from them. Typically 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 receiving 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 unknown damage and retract the offer if you find it.
If, as a buyer, you can provide documentation demonstrating your ability to secure financing, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This holds for any type of real estate offer.)
Once you've made your offer, it's customary for the bank to make a counter offer. Then it will be your decision whether to accept their counter, or make another counter offer.
Realize, you'll be dealing with a process that generally involves several people at the bank, and they don't work evenings or weekends. It's typical for there to be days or even weeks of negotiating back and forth. Precise Real Estate & Dev is accustomed to these situations and will work to ensure there are no undue delays.