Making an offer on REO property or a foreclosure in Austin?


	Savvy consumers will turn to a seasoned pro when considering the purchase of a foreclosed property. Should you have any questions regarding real estate in Austin, Texas, call me or send me an e-mail.

What's an REO?

"REO" or Real Estate Owned are houses which have completed the foreclosure process that the bank or mortgage company currently holds. This is unlike a property up for foreclosure auction. Parrish & Associates, REALTORS® has experience to share with foreclosures and bank owned properties in Austin, Texas

Parrish & Associates, REALTORS® has experience to share with foreclosures and bank owned properties in Austin, Texas

When buying a property during a foreclosure sale, you must pay at least the loan balance plus any interest and other fees accumulated during the foreclosure process. You must also be able to pay with cash in hand. Finally, you'll get the property totally as is. That might comprise of prevailing liens and even current denizens that may require eviction.

A bank-owned property, conversely, is a much neater and attractive option. The REO property didn't find a buyer during foreclosure auction. The lender now owns it. The lender will deal with 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.

You should be aware that REOs may be exempt from typical disclosure requirements. For example, in Texas, it is optional for foreclosures to have a Property Disclosure Statement, a document that typically requires sellers to tell you about any defects of which they are informed. By hiring Parrish & Associates, REALTORS®, you can rest assured knowing all parties are fulfilling Texas state disclosure requirements.

Are REO properties a bargain in Travis County?

It is sometimes thought that any foreclosure must be a steal and an opportunity for easy money. This isn't always true. You have to be very careful about buying a REO if your intent is make money. Even though the bank is usually anxious to sell it promptly, they are also looking to minimize any losses.

Parrish & Associates, REALTORS® has experience to share with foreclosures and bank owned properties in Austin, Texas

When pondering what to pay for REO property, 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 foreclosures. However there are also many REOs that are not good buys and not likely to turn a profit.

Time to make an offer?

Most banks have a department dedicated to REO that you'll work with in buying REO property from them. Commonly 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 their knowledge concerning the condition of the property and what their process is for accepting offers. Since banks typically 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, your offer may be 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, you can expect the bank to counter offer. Then it will be your decision whether to accept their counter, or submit another counter offer. Your transaction might be final in a single day, but that's usually not the case. Since offers and counter offers usually give the other party a day or longer to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer.