Looking for REO property or a foreclosure in Saratoga Springs?
Purchasing a bank-owned property is not something to be taken lightly.
What's an REO?
"REO" or Real Estate Owned are houses which have completed the foreclosure process that the bank or mortgage company currently owns. This is different than 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 ready to pay with cash in hand. Finally, you'll receive the property completely as is. That could comprise of existing liens and even current residents that need to be thrown out.
A bank-owned property, by contrast, is a much neater and attractive proposition. The REO property was unable to find a buyer during foreclosure auction. Now the lender owns it. The bank will see to the removal of tax liens, evict occupants if needed and generally organize for the issuance of a title insurance policy to the buyer at closing.
Note that REOs may be exempt from normal disclosure requirements. For example, in North Carolina, it is optional for foreclosures to have a Property Disclosure Statement, a document that normally requires sellers to disclose any defects they are informed of. By hiring Split Rock Real Estate, you can rest assured knowing all parties are fulfilling New York state disclosure requirements.
Am I guaranteed a good deal when investing in a bank owned property in Saratoga Springs?
It's commonly presumed that any foreclosure must be a steal and an opportunity for guaranteed profit. This isn't necessarily true. You have to be prudent about buying a REO if your intent is to profit from the sale. Even though the bank is typically eager to sell it fast, they are also motivated to get as much as they can for it.
When pondering what to pay for a foreclosure, 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. 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 staff dedicated to REO that you'll work with when buying REO property from them. To get their properties advertised on the local MLS, the lender will frequently 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 find out as much as you can about what they know 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 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.)
After you've submitted your offer, it's customary for the bank to counter offer. At this point it will be up to you to decide whether to accept their counter, or submit another counter offer. Your deal might be final in one day, but that's usually not the case. Since offers and counter offers usually allow a day or more for the other party to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer.