P: 407.401.8506

F: 407.332.8979

317 Northlake Blvd, Ste. 1000

Altamonte Springs, Florida 32701

SERVICES
Short Sale/Loss Mitigation

REO for investors – Buying Bank Owned Properties

An REO (Real Estate Owned) is a property that goes back to the mortgage company after an unsuccessful foreclosure auction. You see, most foreclosure auctions do not even result in bids. After all, if there was enough equity in the property to satisfy the loan, the owner would have probably sold the property and paid off the bank. That is why the property ends up at a foreclosure or trustee sale.


Foreclosure sales begin with a minimum bid that includes the loan balance, any accrued interest, plus attorney's fees and any costs associated with the foreclosure process. In order to bid at a foreclosure auction, you must have a cashier's check in your hand for the full amount of your bid. If you are the successful bidder, you receive the property in "as is" condition, which may include someone still living in the property. There may also be other liens against the property.


Since what is owed to the bank is almost always more than what the property is worth, very few foreclosure auctions result in a successful sale. Then the property "reverts" to the bank. It then becomes an REO, or "real estate owned" property.


REO Properties For Sale

The bank now owns the property and the mortgage loan no longer exists. The bank will handle the eviction, if necessary, and may do some repairs. They will negotiate with the IRS for removal of tax liens and pay off any homeowner’s association dues. As a purchaser of an REO property, the buyer will receive a title insurance policy and the opportunity to investigate the property.


A bank owned property might not be a great bargain. Do your homework before making an offer. Make sure that the price you pay (if you’re successful) is comparable to other homes in the neighborhood. Consider the costs of renovation, including time to complete them. Don’t get caught up in a ‘bidding war’ and pay over market value.


How Banks Sell REO's

Each bank/lender works a little differently, but they all have similar goals. They want to get the best price possible and have no interest in "dumping" real estate cheaply. Generally, banks have an entire department set up to manage their REO inventory.


Once you make an offer to purchase, banks generally present a "counter-offer." It may be at a higher price than you expect, but they have to demonstrate to investors, shareholders and auditors that they attempted to get the highest price possible. You should plan to counter the counter-offer.


Your offer or counter-offer will probably have to be reviewed and approved by several individuals and companies. Even once an offer is accepted, the bank may insert wording like “..subject to corporate approval with 5 days."


Property Condition

Banks always want to sell a property in "as is" condition. Most will provide a Section 1 pest certification, but not unless you include it in your offer and negotiate the point. They will allow you to get all the inspections you want (at your expense), but they may not agree to do any repairs.


Your offer should include an inspection contingency period that allows you to terminate the sale if the inspections reveal unanticipated damages that the bank will not correct.


Even though you agreed to “as is," always give the bank another opportunity to make repairs or give you a credit after you’ve completed your inspections. Sometimes they’ll re-negotiate to save the transaction instead of putting the property back on the market, but don’t take it for granted.


Banks do not want to see a lot of proprietary disclosures. However, if there are real estate agents involved, either representing you or the bank, those agents are required to provide you their disclosure statements.


Most banks will not provide financing on their REOs but it doesn’t hurt to ask. Especially if the property has extensive damage and you are purchasing it "as is."


Making an Offer

Before making an offer, have your agent contact the listing agent and ask the following:

  • Are there any inspection reports?
  • What work has the bank agreed to?
  • Is there a special "as is" form?
  • How long does it take the bank to accept an offer?
  • How does your agent deliver the offer?

Offers are usually FAXED to the bank. The listing agent needs your originals. There is no formal presentation. Keep in mind: nothing happens evenings and weekends (banks are closed).


Since there is no face-to-face presentation to the bank, provide the listing agent with a pre-qualification or better yet, a pre-approval letter and buyer biography. Make your offer easy to accept.


Hopefully these tips will manage your expectations. Remember that REO's sell at pretty close to full market value and are not the deals presented on late night television.


We invite you to contact a representative of Absolute Title of Central Florida to learn more about our short sale services by calling- 407.401.8506 M-F 9am to 6pm EST, or visit our contact page to submit your request to us online.

 

If you’d like to fax us a title order, or other
documentation please dial 407.332.8979

Sure Close Short Sales, Inc.'s
 
Services include:
 
  • A free initial consultation to determine if a Short Sale is a viable option.
  • Gather all required financial information.
  • Package all information per lender’s requirements.
  • Monitor buyer’s side to ensure timely closing.
  • Perform all preliminary searches on the property for you so that when the HUD is submitted it is accurate and not based on assumptions.
  • Review all documents prior to submission making sure everything is right and stacked properly.

We invite you to contact a representative of Absolute Title of Central Florida to learn more about their short sale services by calling- 407.401.8506 M-F 9am to 6pm EST.

PARTNERS Fusilier Realty Group

 

The Navigator

HOME | SERVICES | PRELIMINARY HUD | TITLE FAQS | HELPFUL LINKS | COMPANY PROFILE | CONTACT US

Phone: (407) 401.8506 | Fax: (407) 332.8979

All contents © Absolute Title of Central Florida, Inc. 2011. All Rights Reserved.