Thursday, September 2nd, 2010 at
10:32 am
What is a Foreclosure?
A home in foreclosure happens when the owner has stopped making mortgage payments and the lender has given notice that unless the payments are brought up to date, it will take back the property. Lenders can foreclose for other reasons, but the most common reason lenders file a notice of default is when a borrower is at least two – three payments behind.
If the home owner does not bring the loan current, the lender will take back the property as collateral from the owner. Once the lender has take over ownership the property now becomes a Bank REO. Banks will then list the property with an REO agent to market the home for sale. Since banks are not in the business of owing and maintianing property, it is there goal to sell as fast as possible. Search Foreclosures Here
What are REOs – Real Estate Owned?
REO homes are often considered the best way to buy property because the seller is already out of the picture. It’s just the investor, the investor’s agent, the bank and the bank’s agent who are negotiating the transaction. Real estate investors and home buyers see profit in buying foreclosures because they can often buy the property for less than fair market value.
What is a Short Sale Property?
A short sale occures when a home owned owes more than the property is worth and can no longer make the mortgage payments to the lender. A buyer comes along and makes an offer to purchase the home asking the bank to “short” the mortgage amount to what the homes real fair market value is or in most cases 10% – 20% below fair market value.
Unlike a foreclosure, Home buyers & investors typically buy the home for even less because they are not paying off the existing loan nor making up the back payments. These buyers are striking a deal with the existing lender to take less than what the lender has coming to avoid dealing with a foreclosure. The lender knows that if they foreclose on the home the process will be long and the properties condition will most likley deterioate making the property worth much less.
To learn more about “how to buy a short sale or foreclosure” contact Shawan Pettigrew at 352-478-4300
or go to Sterling Chase Realty on the web.
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Sunday, August 29th, 2010 at
12:31 pm
REO is a common term in the real estate market. It is the abbreviation for Real Estate Owned. The term seems to refer to any property. However, this is used to identify properties that were not sold during the foreclosure sale. This also means that there will not be an REO if the foreclosure sale is successful. The lender repossesses this property after failing to find a buyer.
You might ask why people invest in REOs. After all, no one seemed to want it during the auction. Although this is the case, most REOs are in good condition. The only problem that most REOs face is that the previous owner could no longer afford to pay the mortgage. And besides, your decision to purchase a property should be based on the different factors of choosing a home and not on whether it is foreclosed or REO.
However, investing in REO is a good thing. This is because of the several benefits you can enjoy. After knowing the benefits, people change the way they perceive REO. After all, they are not problematic. Additionally, purchasing one has many advantages. Some of them are indicated below.
One of the benefits of purchasing REO is the fast and easy process. Most first time home buyers will surely appreciate investing in one because they will not have problems in most of the requirements. First, they will not need to evict anyone because the lender responded appropriately. In addition, the property is cheaper by about 20% compared to the market value of most properties in the market. It is cheaper because the lender wants to have the property sold right away. They do not want the property to stay long in their books. It is not a good indicator for the shareholders and other stakeholders.
REOs are mostly risk-free. This is because the lender sees to it that it has a good title. If you buy such property, you do not have to worry about liens and other restrictions. Moreover, you can renegotiate the exiting value of the property. But you have to be careful with the offer you make. Very low offers will trigger the lender to look for another buyer.
As you may have observed, there are several benefits of purchasing REO. However, why would one want to invest in foreclosed properties? Many do so because the properties are cheaper. Aside from that, REO will not exist if the foreclosure is successful. In order to purchase a property, the buyer has to bid. The bidding starts at a minimum value, which covers the balance of the mortgage and other expenses relating to the foreclosure process.
The successful bidder will have the property as is. This means that he will have the responsibility of evicting the occupants. He has to deal with existing liens as well. He has to deal with the damages and other repairs necessary for the house.
It is beneficial to purchase REO. However, its availability is not guaranteed. There are advantages of purchasing foreclosed properties as well. However, you have to exert efforts if you are able to acquire one.
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Friday, April 2nd, 2010 at
11:22 am
I work for a title company and just got transferred to the reo dept. Ok, so first the bank files a foreclosure complaint. Then a sherriffs sale (foreclosure) occurs. 2 questions. What happens if no one bids at the sherriffs sale? Does the bank still own the property? And are they required to release their mortgage? 2nd question. What happens if a “John Doe” wins the auction. Does the bank get this money and thereby release their interst by satisfying the mortgage?
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Sunday, March 28th, 2010 at
12:30 pm
I put an offer on a house in a short sale situation and now the porperty is going REO. to amke a long story short, I want to fire my agent for non-performance and buy it directly from listing agent. What are the legal issues involved if We buy the same house. I have signed a Buyer Agreement that expires Aug 1 2008. Do I need to worry if I buy the same property with someone else?
Thursday, March 25th, 2010 at
12:29 pm
I am looking for a class action attorney who is willing to represent the countless agents in California who have worked diligently on “short sale listings” only to have the bank foreclose on the property and give the listing to an REO broker offering them more commission and refusing compensation for time and money spent on Utilities, cleaning and preparing the properties etc… E mail me if you would like more detail on the unfair, unethical, and scandalous business practices of almost all of the major banks. The list is long.
