Overview of Foreclosure Properties that are REO's and Bank Owned
Foreclosure, Bank (Lender) Owned or REO (Real Estate Owned), essentially have the same meaning and can be a great opportunity for homebuyers with many immediate financial benefits. A foreclosure occurs when a homeowner defaults on loan payments such that the lender files a public default notice. Oftentimes, the lender, or bank, will take ownership of the property with the intention of re-selling it. Prudential Network Realty’s Northeast Florida Foreclosure Listings include these specific types of listings.
The seller referred to in this type of transaction is a bank that owns the property outright. This can be advantageous to buyers due to the fact that the bank owns the property, and therefore is not emotionally tied to the home as they want to move the property and reduce their money consumed by unoccupied homes. This often results in foreclosure properties being below market value in order to encourage a quick sale.
In addition, buyers for this type of property work with the property owner (the bank) throughout the sale, as opposed to a short sale in which the buyer has to deal with both the home seller and the lender. Working directly with the property owner tends to eliminate the significant time lags that are frequently seen in short sales, and tends to promote a more smooth and trouble free closing. View our Foreclosure and REO properties or search our listing database for foreclosure properties in Northeast Florida.
Some Drawbacks to Foreclosure, REO Properties-
No disclosure statements as Property is Sold “As Is”
In a normal property purchase, the seller always prepares a property disclosure statement detailing any problems/issues with the property that the seller is aware of. In a foreclosure purchase, the buyer purchases the property directly from the bank, and because no one from the bank has actually lived in the property, there is no disclosure statement provided to the buyer.
In every foreclosure sale the property is purchased “As Is,” meaning that the seller will not pay for any repairs that are needed. Essentially, what you see is what you get, so buyers need to be very diligent in assessing potential damage to the property, and in determining a realistic value for the property. Other potential issues for buyers is the verbiage of a foreclosure sales contract can be worded such that minimizes the liability to the bank and prevents recourse from the buyer should any issues come up with the property after closing.
Utilizing a seasoned and knowledgeable real estate agent can be a huge benefit to check and navigate through these loopholes and is often essential in determining a realistic offer price. Let us know how we can help you find and purchase a foreclosure property for you!