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Interested in REO property or a foreclosure in Cincinnati?
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Savvy consumers will turn to a seasoned pro when considering a foreclosed property.
For more information, you can contact me through my site or e-mail me. I'm glad to answer questions you have about real estate foreclosures.
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What's an REO?
"REO" or Real Estate Owned are houses which have been foreclosed upon and are currently held by the bank or mortgage company. This is not the same as 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 added during the foreclosure process. The buyer must also be willing to pay with cash in hand. Finally, you'll receive the property 100% as is. That could consist of prevailing liens and even current occupants that need to be removed.
A bank-owned property, conversely, is a much neater and attractive deal. The REO property didn't find a buyer during foreclosure auction. The bank now owns it. The bank will take care of 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 normal disclosure requirements.
In California, for example, banks do not have to give a Transfer Disclosure Statement,
a document that ordinarily requires sellers to disclose any defects of which they are knowledgeable.
By hiring Janet Christie Carpenter, CRS, you can rest assured knowing all parties are fulfilling Ohio state disclosure requirements.
Am I guaranteed a good deal when buying an REO property in Cincinnati?
It is commonly thought that any foreclosure must be a bargain and an opportunity for guaranteed profit. This often isn't true. You have to be prudent about buying a REO if your intent is profit from the sale. While it's true that the bank is usually anxious to sell it quickly, they are also motivated to minimize any losses.
Look closely 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.
It is possible to find REOs with money-making potential, and many people do very well flipping foreclosures. Still there are also many REOs that are not good buys and may lose money.
Time to make an offer?
Most lenders have a department dedicated to REO that you'll work with while buying REO property from them. Commonly 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 find out 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 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 hidden damage and retract the offer if you find it.
As with making any offer on real estate, your offer may be 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, it's customary for the bank to counter offer. From there it will be up to you to decide whether to accept their counter, or offer a counter to the counter offer.
Realize, you'll be working with a process that usually involves multiple people at the bank, and they don't work evenings or weekends. It's quite common for there to be days or even weeks of going back and forth.
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