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Making an offer on REO property or a foreclosure in Greenville?
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Just as with any home purchase, your smartest move is to hire a professional real estate agent.
Should you have any questions about real estate in Greenville, Illinois, call me or send me an e-mail.
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What is an REO?
"REO" stands for Real Estate Owned. These are houses which have been foreclosed upon and are now owned by the bank or mortgage company. This differs from 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 willing to pay with cash in hand. To top everything off, you'll accept the property totally as is. That might consist of standing liens and even current tenants that need to be thrown out.
A bank-owned property, by contrast, is a more tidy and attractive option. The REO property didn't find a buyer during foreclosure auction. Now the bank owns it. The lender will deal with the elimination of tax liens, evict occupants if needed and generally prepare 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 North Carolina, it is optional for foreclosures to have a Property Disclosure Statement,
a document that normally requires sellers to disclose any defects they are informed of.
By hiring 1ST CHOICE REALTY, you can rest assured knowing all parties are fulfilling Illinois state disclosure requirements.
Is REO property in Greenville a bargain?
It's frequently thought that any REO must be a steal and a possibility for easy money. This isn't necessarily true. You have to be prudent about buying a REO if your intent is to make money off of it. Even though the bank is usually eager to offload it fast, they are also motivated to get as much as they can for it.
Look carefully at the listing and sales prices of comparable properties in the neighborhood when making an offer on an REO. And factor in any repairs or upgrades necessary to prepare the house for resale or moving in.
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 may not be money makers.
Ready to make an offer?
Most banks have a department dedicated to REO that you'll work with when buying REO property from them. To get their properties advertised on the local MLS, the lender will typically contract with a listing agent.
Before making your offer, you'll want to contact either the listing agent or REO department at the bank and discover as much as you can about their knowledge about the condition of the property and what their process is for receiving offers. Since banks usually sell REO properties "as is", you'll want to be sure and include an inspection contingency in your offer that gives you time to check for hidden 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 made your offer, you can expect the bank to make a counter offer. From there it will be your choice whether to accept their counter, or offer a counter to the counter offer.
Your transaction might be final in one day, but that's usually not the case. 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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1st CHOICE REALTY
105 W. Harris Ave.
Greenville, IL 62246
Phone: 618-664-7355
Fax: 618-664-4819
Email: josussenbach@sbcglobal.net
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