Buying REO property or a foreclosure in Midlothian?

Savvy consumers will turn to a seasoned pro when considering a foreclosed property.

What's an REO?

"REO" means Real Estate Owned. These are houses which have been through foreclosure and are currently possessed by the bank or mortgage company. This is unlike real estate up for foreclosure auction. Welcome Home Realtors, Inc. has experience to share with foreclosures and bank owned properties in Midlothian, Virginia

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 receive the property 100% as is. That might involve standing liens and even current residents that may require removal.

A bank-owned property, on the contrary, is a much neater and attractive transaction. The REO property was unable to find a buyer during foreclosure auction. Now the lender owns it. The bank will attend to the elimination of tax liens, evict occupants if needed and generally organize for the issuance of a title insurance policy to the buyer at closing.

Note that REOs may be exempt from normal disclosure requirements. For example, in California, banks are not required to give a Transfer Disclosure Statement, a document that usually requires sellers to tell you about any defects they are informed of. By hiring Welcome Home Realtors, Inc., you can rest assured knowing all parties are fulfilling Virginia state disclosure requirements.

Is REO property in Midlothian a bargain?

It is frequently assumed that any REO must be a steal and an opportunity for easy money. This simply isn't true. You have to be cautious about buying a REO if your intent is make money. While it's true that the bank is typically eager to sell it soon, they are also looking to get as much as they can for it.

Welcome Home Realtors, Inc. has experience to share with foreclosures and bank owned properties in Midlothian, Virginia Look closely at the listing and sales prices of similar homes in the neighborhood when considering the purchase of 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.

Ready to make an offer?

Most mortgage companies 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.

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 what they know regarding 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 unseen damage and withdraw 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.

After you've presented your offer, it's customary for the bank to respond with a counter offer. From there it will be your choice whether to accept their counter, or offer a counter to the counter offer. Be aware, you'll be contending with a process that generally involves multiple people at the bank, and they don't work evenings or weekends. It's quite common for the process of offers and counter offers to take days or even weeks.

Welcome Home Realtors, Inc. 5103 Rock Harbour Rd. Midlothian, VA 23112-6204
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