Purchasing REO property or a foreclosure in Odenton?

What's an REO?

"REO" stands for Real Estate Owned. These are properties which have completed the foreclosure process that the bank or mortgage company now owns. This is unlike 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 ready to pay with cash in hand. Finally, you'll receive the property totally as is. That possibly will comprise of current liens and even current residents that need to be evicted.

A bank-owned property, on the contrary, is a more tidy and attractive option. The REO property did not find a buyer during foreclosure auction. The bank now owns it. The bank will handle the elimination of tax liens, evict occupants if needed and generally arrange 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 North Carolina, it is optional for foreclosures to have a Property Disclosure Statement, a document that normally requires sellers to reveal any defects they are aware of. By hiring Gamble Realty, Inc, you can rest assured knowing all parties are fulfilling Maryland state disclosure requirements.

Are REO properties a bargain in Odenton?

It's sometimes believed that any REO must be a steal and an opportunity for easy money. This frequently isn't true. You have to be very careful about buying a REO if your intent is to profit from the sale. Even though the bank is typically eager to sell it quickly, they are also motivated to minimize any losses.

When pondering the value of REO property, carefully analyze 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. The bargains with money making potential exist, and many people do very well buying foreclosures. Still, there are also many REOs that are not good buys and not likely to turn a profit.

Ready 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 usually hire a listing agent.

Before 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 about the condition of the property and what their process is for accepting offers. Since banks most commonly sell REO properties "as is", it's often prudent to include an inspection contingency in your offer that gives you time to check for hidden damage and retract the offer if you find it. As with making any offer on real estate, providing documentation of your ability to secure financing may make your offer more attractive, such as a pre-approval letter from a lender.

After you've submitted 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. Your deal might be settled in a single day, but that's rare. 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.