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Purchasing REO property or a foreclosure in Nashua?
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Foreclosed upon and bank owned property purchases require the assistance of an experience professional.
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.
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What is an REO?
"REO" means Real Estate Owned. These are houses which have gone through foreclosure and are currently possessed by the bank or mortgage company. This is unlike a property up for foreclosure auction.
When buying 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. To top everything off, you'll accept the property entirely as is. That possibly could comprise of prevailing liens and even current residents that may require removal.
A bank-owned property, conversely, is a much neater and attractive option. The REO property did not find a buyer during foreclosure auction. Now the lender owns it. The bank will deal with the elimination 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 standard disclosure requirements.
For example, in North Carolina, it is optional for foreclosures to have a Property Disclosure Statement,
a document that ordinarily requires sellers to reveal any defects they are knowledgeable of.
By hiring RE/MAX Properties, you can rest assured knowing all parties are fulfilling New Hampshire state disclosure requirements.
Are REO properties a bargain in Nashua?
It is commonly presumed that any foreclosure must be a bargain and a chance for easy money. This often isn't true. You have to be very careful about buying a repossession if your intent is make money. Even though the bank is usually eager to sell it soon, they are also looking to get as much as they can for it.
When pondering the value of REO property, 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 not likely to turn a profit.
Prepared 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 often hire a listing agent.
Before 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 accepting 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 hidden damage and withdraw the offer if you find it.
As with making any offer on real estate, providing documentation showing your ability to secure financing may make your offer more attractive, such as a pre-approval letter from a lender.
Once you've presented your offer, you can expect the bank to make a counter offer. Then it will be your decision whether to accept their counter, or offer a counter to the counter offer.
Realize, you'll be dealing with a process that most likely involves multiple people at the bank, and they don't work evenings or weekends. It's not unusual for there to be days or even weeks of negotiating back and forth.
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