Making an offer on REO property or a foreclosure in Stockton?


	Investing in a bank-owned property is not something to be taken lightly. For more information, just contact me through my site or e-mail me. I'm glad to address questions you have about real estate foreclosures.

What's an REO?

"REO" or Real Estate Owned are homes which have been through foreclosure and are now owned by the bank or mortgage company. This is not the same as real estate up for foreclosure auction. Prudential California Realty has experience to share with foreclosures and bank owned properties in Stockton, California

Prudential California Realty has experience to share with foreclosures and bank owned properties in Stockton, California

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 prepared to pay with cash in hand. To top everything off, you'll accept the property totally as is. That could include existing liens and even current tenants that need to be evicted.

A bank-owned property, on the other hand, is a much cleaner and attractive deal. The REO property didn't find a buyer during foreclosure auction. The lender now owns it. The bank will take care of the removal of tax liens, evict occupants if needed and generally plan 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 not required to give a Transfer Disclosure Statement, a document that usually requires sellers to tell you about any defects of which they are knowledgeable. By hiring Prudential California Realty, you can rest assured knowing all parties are fulfilling California state disclosure requirements.

Am I assured a good deal when buying a bank owned property in Stockton?

It is commonly believed that any REO must be a good buy and an opportunity for guaranteed profit. This simply isn't true. You have to be very careful about buying a REO if your intent is make a profit. Even though the bank is often eager to offload it promptly, they are also looking to minimize any losses.

Prudential California Realty has experience to share with foreclosures and bank owned properties in Stockton, California

Look closely at the listing and sales prices of comparable properties in the neighborhood when making an offer on an REO. And factor in any repairs or upgrades necessary to prepare the house for resale or moving in. It is possible to find REOs with money-making potential, and many people do very well flipping foreclosures. Still there are also many REOs that are not good buys and may not be money makers.

Time 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 typically 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 discover as much as you can about their knowledge concerning the condition of the property and what their process is for receiving offers. Since banks most commonly sell REO properties "as is", it's often prudent to include an inspection contingency in your offer that gives you time to check for unseen damage and withdraw the offer if you find it. If, as a buyer, you can provide documentation demonstrating 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 holds for any type of real estate offer.)

Once you've made 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 make another counter offer. Your transaction could be final in a single day, but that's rare. 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. Prudential California Realty is accustomed to these situations and will work to ensure there are no undue delays.