Looking for REO property or a foreclosure in San Marcos?
Investing in a bank-owned property is not something to be taken lightly.
Should you have any questions regarding real estate in San Marcos, Texas, call me or send me an e-mail.
What's an REO?
"REO" or Real Estate Owned are homes which have completed the foreclosure process that the bank or mortgage company currently holds. This differs from real estate 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 accrued 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 may involve prevailing liens and even current tenants that may require eviction.
A bank-owned property, conversely, is a much cleaner and attractive proposition. The REO property didn't find a buyer during foreclosure auction. The bank now owns it. The lender will attend to 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.
For example, in Texas, it is optional for foreclosures to have a Property Disclosure Statement,
a document that normally requires sellers to disclose any defects they are aware of.
By hiring REAL ESTATE, you can rest assured knowing all parties are fulfilling Texas state disclosure requirements.
Am I guaranteed a good deal when purchasing a bank owned property in San Marcos?
It's sometimes assumed that any REO must be a steal and a possibility for guaranteed profit. This isn't necessarily true. You have to be cautious about buying a repossession if your intent is make a profit. Even though the bank is often anxious to sell it quickly, they are also motivated to get as much as they can for it.
When contemplating the value of REO property, 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.
The bargains with money making potential exist, and many people do very well buying and selling foreclosures. However there are also many REOs that are not good buys and may not be money makers.
Time to make an offer?
Most lenders have staff 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.
Prior to 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 their knowledge regarding the condition of the property and what their process is for receiving offers. Since banks most commonly sell REO properties "as is", you may want 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.
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 is generally true for any real estate offer.)
Once you've submitted your offer, it's customary for the bank to make a counter offer. At this point it will be your decision whether to accept their counter, or submit another counter offer.
Your deal might be settled in one day, but that's rare. Since offers and counter offers usually allow a day or more for the other party to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer. REAL ESTATE is accustomed to these situations and will work to ensure there are no undue delays.
When contemplating the value of REO property, 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.
The bargains with money making potential exist, and many people do very well buying and selling foreclosures. However there are also many REOs that are not good buys and may not be money makers.
