Looking for REO property or a foreclosure in Berthoud?
Purchasing a bank-owned property is not something to be taken casually.
Should you have questions regarding real estate in Berthoud, Colorado, call us
or send us an e-mail
What is an REO?
"REO" stands for Real Estate Owned. These are homes which have been foreclosed upon that the bank or mortgage company presently holds. This is unlike 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 amassed during the foreclosure process. You must also be willing to pay with cash in hand. To top everything off, you'll accept the property totally as is. That may comprise of existing liens and even current tenants that may require removal.
A bank-owned property, on the other hand, is a more tidy and attractive transaction. The REO property did not find a buyer during foreclosure auction. The lender now owns it. The lender will deal with the elimination of tax liens, evict occupants if needed and generally plan for the issuance of a title insurance policy to the buyer at closing.
Do be aware that REOs may be exempt from normal disclosure requirements.
For instance, in California, banks are exempt from giving a Transfer Disclosure Statement,
a document that normally requires sellers to make known any defects of which they are aware.
By hiring Cathy Heckman, you can rest assured knowing all parties are fulfilling Colorado state disclosure requirements.
Is REO property in Berthoud a bargain?
It's occasionally believed that any REO must be a bargain and an opportunity for easy money. This isn't always true. You have to be prudent about buying a repossession if your intent is to profit from the sale. While it's true that the bank is typically anxious to offload it promptly, they are also motivated to get as much as they can for it.
Look closely at the listing and sales prices of competing 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.
There are bargains with potential to make money, and many people do very well buying and selling foreclosures. Still, there are also many REOs that are not good buys and may not be money makers.
Ready to make an offer?
Most lenders have staff 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 frequently use 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 what they know concerning the condition of the property and what their process is for receiving offers. Since banks typically sell REO properties "as is", it's often prudent to include an inspection contingency in your offer that gives you time to check for unknown damage and terminate the offer if you find it.
As with making any offer on real estate, providing documentation of 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. From there it will be your choice whether to accept their counter, or submit another counter offer.
Your transaction could be settled in one day, but that's usually not the case. Since offers and counter offers usually give the other party a day or longer to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer.