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Looking for REO property or a foreclosure in Miami?
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Just as with any property purchase, your smartest move is to hire a professional real estate agent.
Should you have questions about real estate in Miami, Florida, call me or send me an e-mail.
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What's an REO?
"REO" is short for Real Estate Owned. These are properties which have gone through foreclosure that the bank or mortgage company now holds. 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 added during the foreclosure process. You must also be able to pay with cash in hand. Finally, you'll receive the property totally as is. That might include standing liens and even current residents that may require eviction.
A bank-owned property, on the other hand, is a much cleaner and attractive option. The REO property was unable to find a buyer during foreclosure auction. The lender now owns it. The lender will deal with 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 Texas, it is optional for foreclosures to have a Property Disclosure Statement,
a document that usually requires sellers to disclose any defects they are knowledgeable of.
By hiring Pryor Realty, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Am I assured a low price when purchasing a bank owned property in Miami?
It is frequently believed that any REO must be a good buy and an opportunity for easy money. This simply isn't true. You have to be very careful about buying a repossession if your intent is make a profit. While it's true that the bank is usually anxious to sell it quickly, they are also looking to get as much as they can for it.
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.
Time to make an offer?
Most mortgage companies 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 typically use a listing agent.
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 what they know regarding the condition of the property and what their process is for accepting offers. Since banks usually sell REO properties "as is", you may want to include an inspection contingency in your offer that gives you time to check for unseen damage and terminate the offer if you find it.
If, as a buyer, you can provide documentation proving 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.)
Once you've made your offer, it's customary for the bank to respond with a counter offer. Then it will be your decision whether to accept their counter, or make another counter offer.
Your deal might be settled in a single day, but that's usually not the case. Since offers and counter offers usually allow a day or more for the other party to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer.
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