When a homeowner has to forfeit the rights for their property to a bank it becomes a foreclosure. If a homeowner can’t pay off their debt on the property it will then go to auction. If at auction a foreclosure doesn’t sell, the bank takes the property and turns it into an REO (Real Estate Owned) foreclosure property. A bank will normally try to sell an REO Foreclosure through a local broker.
An REO Property will have its tax liens payed off and previous tenants evicted by the bank that now owns it. The bank may even take care of some of the repairs in the home. Depending on where you are a large portion of the housing market may be made up of REO properties. A real estate agent can normally help you find any REO properties within your desired area.
A home doesn’t become a foreclosure or an REO overnight. The foreclosure process starts with the homeowner missing payments on the home. After enough missed payments, ranging anywhere from 3 to 6 months, the lender for the property will record a public notice with the County Recorder’s Office; this indicates that the homeowner had defaulted on the mortgage for the property. At this point the homeowner will enter ‘pre-foreclosure,’ they will have a period of time to work out an arrangement with the lender. Normally they will have to either pay off what they owe or short-sale the home. If they can’t come to an arrangement or can’t pay off what they owe then the home will go to auction. At this point the lender (or a representative of theirs) will set a date for the property to be sold at auction. This date is then recorded with the County Recorder’s Office and a notification of the date is sent to the homeowner, posted onto the property, and placed into the newspaper. Should the home not sell at the auction the lender will take ownership of the property for the bank. It can now be considered an REO foreclosure property, and will most likely be listed by a local real estate broker in an attempt to sell it.
Banks tend to not sell homes directly to buyers. A bank will list any home they’re willing to sell through a real estate agent. There are even some agents that specialize in foreclosures and REO listings. It’s important to understand that buying a foreclosed home is different than buying a regular listing. Be sure to understand the differences and weigh the pros and cons that come with purchasing an REO foreclosure.
A foreclosure doesn’t have a homeowner who might have sentimental attachment to the property, and there is only one real estate agent you’ll have to work with. There’s a chance an REO property will present itself as a great deal as well; you may even find the property in great condition and move in ready. If the value of the home goes up you may even find yourself able to get a larger return for it. An REO normally has a clean title as a bank tends to pay any outstanding fees on the property. A home inspection can be requested before getting into a contract as well so it’s easy to back out of a home that may be more work then you expected. Best of all, when buying an REO property you may very well qualify for a full loan from your bank.
When shopping for an REO foreclosure you’ll need to have a lender preapproval letter before a seller will think to accept any offer you put in. There is also little room for price negotiations when it comes to foreclosures; the home will normally come as is and any repairs needed will be your job to take care of. It’s likely that as the property sits thieves and vandals could have done damage to the property, or evicted homeowners might have sold major appliances and damaged the home before leaving. A seller disclosure isn’t included with a foreclosed home, and any debt connected to the property will become your responsibility.
If you find the benefits of buying a foreclosure outweigh the negatives then it’s time to start looking at foreclosures. First you’ll need to get preapproval from a lender, as a seller won’t take in an offer without it. You’ll also need to find a real estate broker who works on REO Foreclosures. As the Florida REO Broker of Choice, we at CENTURY 21 All Professional are readily available to help you in finding foreclosure homes; we can even recommend a local lender if you’re having trouble finding one.
With preapproval letter in hand and an agent at your side, the next step is finding some foreclosures. It’s important to get an inspection and appraisal done for any home you’re considering putting an offer on. There’s always a chance that a foreclosed home will have a lot more needs then it lets on at a glance. Make sure to check that the title for the home is clear as well, you can accomplish this with a title company.
Just because some foreclosure prices are set in stone doesn’t mean all of them are. Don’t be afraid to negotiate the price a little when you’re putting in an offer, especially with a home in need of major repairs. Take a look at recent sales for comparable properties and how quickly homes are selling when you make your offer. If foreclosures are selling quickly then it’s important to lead with your best offer, this helps minimize the risk of losing the property to someone else.
Chosen as the Florida REO Broker of Choice for residential and commercial properties, CENTURY 21 All Professional is more than equipped to handle REO Foreclosures. We’re always ready to provide our foreclosure services. Whatever the need, we can help anyone looking for foreclosures in Port St Lucie and St. Lucie County. We offer an assortment of services that helped us earn the title of REO Broker of Choice.
Occupancy Status – We can provide information on a foreclosure and inform you of whether or not it’s currently occupied.
BPO'S – Also known as a ‘Broker Price Opinion,’ we can provide you with an opinion of the market value of the foreclosure for far less than a full-blown appraisal.
Cash for Keys – We offer cash for keys to help vacate a tenant from a property willingly with a cash incentive.
Evictions – We can assist in the eviction process and help remove a tenant from the foreclosed property.
Preservation – We are able to keep a foreclosed property in good shape and preserve its condition while it’s on the market.
Weekly Inspections – We can provide weekly inspections on the foreclosed property to make sure vandals and thieves do not damage it in any way.
Re-Key – We can re-key locks in a property to eliminate any keys that may have been taken or compromised or to make a set of locks share a common key.
Repair Estimates – We will have our experts go through the home and put together an estimate of all the repair costs necessary to get a home into good shape.
Emergency Repairs – If any urgent repairs need to be made we can provide assistance as quickly as possible.
We provide all of our services within a 24-48 hour time frame.