Looking for REO property or a foreclosure in Miami?
Just as with any home purchase, your wisest move is to hire a professional real estate agent. If you have any questions about real estate in Miami, Florida, call me or send me an e-mail.
What is an REO?
"REO" is an abbreviation for Real Estate Owned. These are houses which have been foreclosed upon that the bank or mortgage company presently possesses. This is not the same as 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 amassed during the foreclosure process. The buyer must also be prepared to pay with cash in hand. Finally, you'll get the property entirely as is. That possibly could include prevailing liens and even current denizens that need to be removed.
A bank-owned property, on the other hand, is a more tidy and attractive proposition. The REO property didn't 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 organize for the issuance of a title insurance policy to the buyer at closing.
Take notice that REOs may be exempt from normal 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 tell you about any defects of which they are knowledgeable. By hiring Maria E. Manso, P.A., you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Are REO properties a bargain in Miami?
It is occasionally thought that any foreclosure must be a good buy and a chance for guaranteed profit. This simply isn't true. You have to be cautious about buying a repossession if your intent is profit from the sale. Even though the bank is typically anxious to sell it soon, they are also motivated to minimize any losses.
When contemplating what to pay for 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 and selling foreclosures. Still there are also many REOs that are not good buys and may lose money.
Time to make an offer?
Most banks have staff dedicated to REO that you'll work with while buying REO property from them. Normally 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 receiving 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 unknown damage and cancel the offer if you find it. As with making any offer on real estate, providing documentation of your ability to pay may make your offer more attractive, such as a pre-approval letter from a lender.
Once you've presented your offer, you can expect the bank to make a counter offer. Then it will be your choice whether to accept their counter, or make another counter offer. Realize, you'll be dealing with a process that generally involves a group of people at the bank, and they don't work evenings or weekends. It's not uncommon for there to be days or even weeks of negotiating back and forth. Maria E. Manso, P.A. is are used to working around the schedules of this type of seller and will do everything possible to ensure there are no unnecessary delays.
Maria E. Manso, P.A. 901 South Miami Avenue, # 215 Miami, FL 33130
When contemplating what to pay for 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 and selling foreclosures. Still there are also many REOs that are not good buys and may lose money.
