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Making an offer on REO property or a foreclosure in Southport/Oak Island, Caswell Beach, Boiling Spring Lakes or other areas of Brunswick County?
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Foreclosed upon and bank owned property purchases require the assistance of an experience professional. If you have any questions about real estate in Southport, North Carolina, call me or send me an e-mail. |
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What is an REO?"REO" is short for Real Estate Owned. These are houses which have been foreclosed upon and are currently owned by the bank or mortgage company. This differs from 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 accrued during the foreclosure process. The buyer must also be ready to pay with cash in hand. Finally, you'll receive the property 100% as is. That possibly may involve prevailing liens and even current denizens that may require eviction.
A bank-owned property, on the other hand, is a much cleaner and attractive proposition. The REO property did not find a buyer during foreclosure auction. The lender now owns it. The bank will handle 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.
You should be aware that REOs may be exempt from normal disclosure requirements. For example, in North Carolina, foreclosures do not have to have a Property Disclosure Statement, a document that typically requires sellers to tell you about any defects they are informed of. By hiring Coldwell Banker Sea Coast Realty, you can rest assured knowing all parties are fulfilling North Carolina state disclosure requirements.
Are REO properties a bargain in Southport/Oak Island/Boiling Spring Lakes?It is occasionally assumed that any foreclosure must be a bargain and a chance for guaranteed profit. This frequently isn't true. You have to be cautious about buying a REO if your intent is make money. Even though the bank is usually anxious to sell it soon, they are also looking to get as much as they can for it.
 When pondering the value of a foreclosure, you need to look closely at 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 may lose money.
Ready to make an offer?Most banks have a department 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 usually 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 find out as much as you can about their knowledge about the condition of the property and what their process is for accepting offers. Since banks usually sell REO properties "as is", it's often prudent to include an inspection contingency in your offer that gives you time to check for hidden damage and withdraw 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 made your offer, you can expect the bank to make a counter offer. From there it will be up to you to decide whether to accept their counter, or offer a counter to the counter offer. Your deal could be final 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.
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Susan Tyson Scott, Broker / REALTOR
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