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Purchasing REO property or a foreclosure in Franklin?
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Just as with any home purchase, your smartest move is to hire a professional real estate agent.
For more information, you can contact me through my site or e-mail me. I'm happy to address questions you have regarding real estate foreclosures.
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What's an REO?
"REO" or Real Estate Owned are homes which have been foreclosed upon that the bank or mortgage company presently possesses. This is not the same as 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 accrued during the foreclosure process. You must also be able to pay with cash in hand. Finally, you'll get the property entirely as is. That may include existing liens and even current residents that may require removal.
A bank-owned property, conversely, is a much cleaner and attractive transaction. The REO property did not find a buyer during foreclosure auction. Now the bank owns it. The bank will handle the removal of tax liens, evict occupants if needed and generally arrange for the issuance of a title insurance policy to the buyer at closing.
Note that REOs may be exempt from typical disclosure requirements.
For example, in Nevada, it is optional for foreclosures to have a Property Disclosure Statement,
a document that typically requires sellers to reveal any defects of which they are informed.
By hiring Crye-Leike, you can rest assured knowing all parties are fulfilling Tennessee state disclosure requirements.
Am I guaranteed a bargain when investing in a bank owned property in Franklin?
It's frequently believed that any REO must be a steal and an opportunity for guaranteed profit. This isn't always true. You have to be prudent about buying a REO if your intent is make money. While it's true that the bank is often eager to offload it quickly, they are also motivated to minimize any losses.
Look closely at the listing and sales prices of similar homes in the neighborhood when considering the purchase of an REO. And factor in any repairs or remodeling necessary to prepare the house for resale or moving in.
It is possible to find REOs with money-making potential, 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 mortgage companies have a department dedicated to REO that you'll work with while buying REO property from them. To get their properties advertised on the local MLS, the lender will usually contract with 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 their knowledge concerning the condition of the property and what their process is for taking 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 proving 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. Then it will be your decision whether to accept their counter, or offer a counter to the counter offer.
Understand, you'll be dealing with a process that usually involves several people at the bank, and they don't work evenings or weekends. It's not uncommon for the process of offers and counter offers to take days or even weeks. Crye-Leike 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.
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Today's Rates:
| 30-yr Fixed | 3.87% | 4% | | 15-yr Fixed | 3.14% | 3.31% | | 1-yr Adj | 2.76% | 3.42% |
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