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Looking for REO property or a foreclosure in Indianapolis?
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Savvy consumers will turn to a seasoned pro when considering the purchase of a foreclosed property.
For more information, just contact me through my site or e-mail me. I'm happy to address any questions you have regarding real estate foreclosures.
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What is an REO?
"REO" or Real Estate Owned are properties which have completed the foreclosure process and are now owned by the bank or mortgage company. This differs from real estate 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. You must also be prepared to pay with cash in hand. To top everything off, you'll receive the property 100% as is. That possibly could comprise of standing liens and even current tenants that may require expulsion.
A bank-owned property, conversely, is a much neater and attractive transaction. The REO property did not find a buyer during foreclosure auction. Now the lender owns it. The lender will handle 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.
You should be aware that REOs may be exempt from normal disclosure requirements.
For example, in Nevada, it is optional for foreclosures to have a Property Disclosure Statement,
a document that ordinarily requires sellers to reveal any defects they are aware of.
By hiring The Sanders Group Realty, LLC, you can rest assured knowing all parties are fulfilling Indiana state disclosure requirements.
Are REO properties a bargain in Marion County?
It's occasionally believed that any REO must be a good buy and an opportunity for guaranteed profit. This frequently isn't true. You have to be prudent about buying a repossession if your intent is profit from the sale. Even though the bank is typically anxious to offload it quickly, they are also looking to get as much as they can for it.
Look closely at the listing and sales prices of similar homes 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 buying foreclosures. But there are also many REOs that are not good buys and not likely to turn a profit.
Prepared to make an offer?
Most mortgage companies have staff 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 hire a listing agent.
Prior to making your offer, you'll want to contact either the listing agent or REO department at the bank and discover as much as you can about their knowledge about the condition of the property and what their process is for taking 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 cancel the offer if you find it.
If, as a buyer, you can provide documentation demonstrating your ability to secure financing, 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.)
After you've made your offer, it's customary for the bank to make a counter offer. From there it will be up to you to decide whether to accept their counter, or make another counter offer.
Understand, 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 typical for there to be days or even weeks of going back and forth.
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"All Things Are Possible!"
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