Interested in REO property or a foreclosure in Fort Myers?
Just as with any home purchase, your smartest move is to hire a professional real estate agent. Keep in mind purchasing this type of property has special issues and info to know before making an offer. If you have questions about real estate in Fort Myers, Florida, 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 possesses. This is not the same as 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 added during the foreclosure process. You must also be prepared to pay with cash in hand. Finally, you'll receive the property totally as is. That possibly could include current liens and even current occupants that need to be removed.
A bank-owned property, on the other hand, is a more tidy and attractive transaction. The REO property was unable to find a buyer during foreclosure auction. Now the bank owns it. The lender will attend to the removal of tax liens, evict occupants if needed and generally organize for the issuance of a title insurance policy to the buyer at closing.
Do be aware 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 make known any defects of which they are aware. By hiring Morris Williams Realty, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Are REO properties a bargain in Lee County?
It's commonly assumed that any REO must be a good buy and a chance for guaranteed profit. This frequently isn't true. You have to be prudent about buying a repossession if your intent is to profit from the sale. Even though the bank is typically anxious to offload it fast, they are also motivated to minimize any losses.
When considering the value of a foreclosure, 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. 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 may not be money makers.
Time to make an offer?
Most mortgage companies have a department dedicated to REO that you'll work with when 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 learn as much as you can about what they know concerning the condition of the property and what their process is for receiving offers. Since banks typically 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 unknown 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 type of real estate offer.)
After you've made your offer, it's customary for the bank to respond with a counter offer. At this point it will be your decision whether to accept their counter, or offer a counter to the counter offer. Your deal could be settled in a single 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.