Foreclosed upon and bank owned property purchases require the assistance of an experience professional.
Should you have questions regarding real estate in San Juan, Puerto Rico, call me or send me an e-mail.
What's an REO?
"REO" is short for Real Estate Owned. These are homes which have completed the foreclosure process that the bank or mortgage company currently holds. This is different than real estate up for foreclosure auction.
When buying a property during a foreclosure sale, you must pay at least the loan balance plus any interest and other fees accrued during the foreclosure process. The buyer must also be ready to pay with cash in hand. Finally, you'll accept the property totally as is. That possibly could involve current liens and even current residents that need to be evicted.
A bank-owned property, by contrast, is a much neater and attractive deal. The REO property was unable to find a buyer during foreclosure auction. The bank now owns it. The bank will take care of 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.
Take notice that REOs may be exempt from normal disclosure requirements.
For example, in California, banks do not have to give a Transfer Disclosure Statement,
a document that usually requires sellers to reveal any defects of which they are informed.
By hiring Clasificados Online De Propiedades En Puerto Rico, you can rest assured knowing all parties are fulfilling Puerto Rico state disclosure requirements.
Is REO property in San Juan a bargain?
It is occasionally assumed that any REO must be a good buy and a possibility for guaranteed profit. This isn't necessarily the case. You have to be very careful about buying a repossession if your intent is make a profit. Even though the bank is often anxious to offload it soon, they are also looking to get as much as they can for it.
When pondering the value of 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 flipping foreclosures. But there are also many REOs that are not good buys and may not be money makers.
Ready to make an offer?
Most banks have a department dedicated to REO that you'll work with in buying REO property from them. Usually the REO department will use a listing agent to get their REO properties listed on the local MLS.
Before making your offer, you'll want to contact either the listing agent or REO department at the bank and find out as much as you can about their knowledge concerning the condition of the property and what their process is for receiving offers. Since banks almost always sell REO properties "as is", you may want to include an inspection contingency in your offer that gives you time to check for hidden damage and terminate 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.
After you've submitted your offer, you can expect the bank to make a counter offer. From there it will be up to you to decide whether to accept their counter, or offer a counter to the counter offer.
Realize, you'll be dealing with a process that probably 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 going back and forth.
When pondering the value of 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 flipping foreclosures. But there are also many REOs that are not good buys and may not be money makers.
