Purchasing REO property or a foreclosure in Harmony?


	Purchasing a bank-owned property is not something to be taken lightly. For more information, simply contact me through my site or e-mail me. I'm glad to answer questions you have about real estate foreclosures.

What is an REO?

"REO" or Real Estate Owned are properties which have been through foreclosure that the bank or mortgage company presently possesses. This is different than a property up for foreclosure auction. RE/MAX Select Properties has experience to share with foreclosures and bank owned properties in Harmony, Minnesota

RE/MAX Select Properties has experience to share with foreclosures and bank owned properties in Harmony, Minnesota

If you buy 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 willing to pay with cash in hand. And on top of all that, you'll receive the property 100% as is. That possibly could comprise of existing liens and even current tenants that may require removal.

A bank-owned property, conversely, is a much cleaner and attractive proposition. The REO property did not find a buyer during foreclosure auction. Now the lender owns it. The bank will take care of the removal of tax liens, evict occupants if needed and generally prepare 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 Texas, it is optional for foreclosures to have a Property Disclosure Statement, a document that normally requires sellers to make known any defects of which they are aware. By hiring RE/MAX Select Properties, you can rest assured knowing all parties are fulfilling Minnesota state disclosure requirements.

Is REO property in Harmony a bargain?

It's occasionally presumed that any foreclosure must be a steal and a possibility for easy money. This frequently isn't true. You have to be very careful about buying a repossession if your intent is make money. While it's true that the bank is typically eager to sell it quickly, they are also looking to get as much as they can for it.

RE/MAX Select Properties has experience to share with foreclosures and bank owned properties in Harmony, Minnesota

When pondering what to pay for REO property, you need to look closely at 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 buying foreclosures. But there are also many REOs that are not good buys and may not be money makers.

Prepared to make an offer?

Most lenders 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 learn as much as you can about their knowledge about the condition of the property and what their process is for receiving offers. Since banks typically sell REO properties "as is", it's often prudent 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. As with making any offer on real estate, you'll make your offer more attractive if you can include documentation of your ability to pay, 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 decision whether to accept their counter, or submit another counter offer. Realize, you'll be working with a process that usually involves several people at the bank, and they don't work evenings or weekends. It's not unusual for there to be days or even weeks of going back and forth. RE/MAX Select Properties is accustomed to these situations and will work to ensure there are no unnecessary delays.