Buying REO property or a foreclosure in Orland Park?
Just as with any property purchase, your wisest move is to hire a professional real estate agent.
What's an REO?
"REO" or Real Estate Owned are homes which have been foreclosed upon and are now possessed by the bank or mortgage company. This is not the same as 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 added during the foreclosure process. You must also be prepared to pay with cash in hand. To top everything off, you'll accept the property totally as is. That possibly could include current liens and even current tenants that may require expulsion.
A bank-owned property, on the other hand, is a much neater and attractive proposition. The REO property didn't find a buyer during foreclosure auction. Now the bank owns it. The lender 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 are exempt from giving a Transfer Disclosure Statement,
a document that normally requires sellers to make known any defects of which they are knowledgeable.
By hiring Classic Realty Group, you can rest assured knowing all parties are fulfilling Illinois state disclosure requirements.
Is REO property in Orland Park a bargain?
It's commonly assumed that any REO must be a steal and a possibility for easy money. This simply isn't true. You have to be prudent about buying a REO if your intent is make a profit. Even though the bank is usually eager to offload it promptly, they are also motivated to minimize any losses.
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.
The bargains with money making potential exist, 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.
Time to make an offer?
Most banks have staff dedicated to REO that you'll work with in buying REO property from them. Commonly 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 learn as much as you can about their knowledge about the condition of the property and what their process is for getting offers. Since banks most commonly sell REO properties "as is", it may be in your best interest to include an inspection contingency in your offer that gives you time to check for hidden damage and cancel the offer if you find it.
If, as a buyer, you can provide documentation demonstrating your ability to pay, 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.)
After you've made your offer, you can expect the bank to respond with a counter offer. At this point it will be your choice whether to accept their counter, or offer a counter to the counter offer.
Be aware, you'll be contending with a process that generally involves multiple people at the bank, and they don't work evenings or weekends. It's quite common for the process of offers and counter offers to take days or even weeks. Classic Realty Group 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.
Classic Realty Group 15545 S. 71st Ct., suite 202 Orland Park, Il 60462
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.
The bargains with money making potential exist, 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.
