Looking for REO property or a foreclosure in Cleveland?
Smart consumers will turn to a seasoned pro when considering the purchase of a foreclosed property. For more information, just contact us
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What's an REO?
"REO" or Real Estate Owned are properties which have been foreclosed upon and are now owned by the bank or mortgage company. This differs from a property 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 amassed during the foreclosure process. The buyer must also be willing to pay with cash in hand. Finally, you'll get the property completely as is. That possibly could involve prevailing liens and even current residents that may require expulsion.
A bank-owned property, by contrast, is a much cleaner and attractive transaction. The REO property was unable to find a buyer during foreclosure auction. The bank now owns it. The bank will attend to the removal of tax liens, evict occupants if needed and generally prepare for the issuance of a title insurance policy to the buyer at closing.
Do be aware that REOs may be exempt from typical disclosure requirements. For example, in Nevada, it is optional for foreclosures to have a Property Disclosure Statement, a document that usually requires sellers to disclose any defects they are informed of. By hiring E & D Realty and Investment Co., Inc., you can rest assured knowing all parties are fulfilling Ohio state disclosure requirements.
Is REO property in Cleveland a bargain?
It's sometimes assumed that any REO must be a steal and an opportunity for guaranteed profit. This often isn't true. You have to be very careful about buying a REO if your intent is to make money. While it's true that the bank is usually anxious to sell it quickly, they are also motivated to minimize any losses.
Look closely at the listing and sales prices of competing properties 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. There are bargains with potential to make money, and many people do very well buying and selling foreclosures. However, there are also many REOs that are not good buys and not likely to turn a profit.
All set to make an offer?
Most banks have a department dedicated to REO that you'll work with in buying REO property from them. To get their properties advertised on the local MLS, the lender will frequently 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 what they know concerning the condition of the property and what their process is for taking offers. Since banks usually sell REO properties "as is", it's often prudent to include an inspection contingency in your offer that gives you time to check for unseen damage and cancel 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.
Once you've made your offer, it's customary for the bank to respond with a counter offer. At this point it will be up to you to decide whether to accept their counter, or offer a counter to the counter offer. Be aware, you'll be working with a process that generally involves multiple people at the bank, and they don't work evenings or weekends. It's typical for the process of offers and counter offers to take days or even weeks. E & D Realty and Investment Co., Inc. is used to working around the schedules of this type of seller and will do everything possible to ensure there are no undue delays.