Interested in REO property or a foreclosure in Chula Vista?
What is an REO?"REO" means Real Estate Owned. These are homes which have completed the foreclosure process that the bank or mortgage company currently holds. This is unlike 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. You must also be ready to pay with cash in hand. And on top of all that, you'll accept the property 100% as is. That could consist of existing liens and even current residents that may require expulsion.
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 lender will take care of the removal of tax liens, evict occupants if needed and generally plan for the issuance of a title insurance policy to the buyer at closing.
Note that REOs may be exempt from standard disclosure requirements. For example, in California, banks are not required to give a Transfer Disclosure Statement, a document that typically requires sellers to disclose any defects they are informed of. By hiring Manalo Realty, you can rest assured knowing all parties are fulfilling California state disclosure requirements.
Is REO property in Chula Vista a bargain?It's occasionally assumed that any foreclosure must be a good deal and a possibility for easy money. This often isn't true. You have to be very careful about buying a repossession if your intent is profit from the sale. Even though the bank is typically eager to sell it quickly, they are also looking to get as much as they can for it.
When pondering 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. There are bargains with potential to make money, and many people do very well buying foreclosures. However there are also many REOs that are not good buys and not likely to turn a profit.
Ready to make an offer?Most lenders have a department dedicated to REO that you'll work with when buying REO property from them. Usually 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 discover as much as you can about what they know concerning the condition of the property and what their process is for accepting offers. Since banks typically 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. If, as a buyer, you can provide documentation showing 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 submitted your offer, it's customary for the bank to counter offer. Then it will be your choice whether to accept their counter, or offer a counter to the counter offer. Be aware, you'll be working with a process that probably involves a group of people at the bank, and they don't work evenings or weekends. It's typical for there to be days or even weeks of going back and forth. Manalo Realty is accustomed to these situations and will work to ensure there are no undue delays.