Making an offer on REO property or a foreclosure in the Twin Cities?


	Foreclosed upon and bank owned property purchases require the assistance of an experience professional. If you have questions regarding real estate in Maple Grove, Minnesota, call me or send me an e-mail.

What is an REO?

"REO" or Real Estate Owned are houses which have been through foreclosure and are presently owned by the bank or mortgage company. This is unlike a property up for foreclosure auction. Incentive Realty has experience to share with foreclosures and bank owned properties in Maple Grove, Minnesota

Incentive Realty has experience to share with foreclosures and bank owned properties in Maple Grove, Minnesota

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. You must also be able to pay with cash in hand. Finally, you'll accept the property entirely as is. That possibly could comprise of prevailing liens and even current tenants that may require removal.

A bank-owned property, on the other hand, is a more tidy and attractive deal. The REO property was unable to find a buyer during foreclosure auction. Now the lender owns it. The bank will see to 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 normal disclosure requirements. For example, in Nevada, it is optional for foreclosures to have a Property Disclosure Statement, a document that usually requires sellers to tell you about any defects of which they are informed. By hiring Incentive Realty, you can rest assured knowing all parties are fulfilling Minnesota state disclosure requirements.

Am I assured a good deal when purchasing a bank owned property in Maple Grove?

It's commonly assumed that any foreclosure must be a bargain and a possibility for guaranteed profit. This isn't necessarily the case. You have to be very careful about buying a REO if your intent is make a profit. Even though the bank is usually eager to offload it soon, they are also looking to get as much as they can for it.

Incentive Realty has experience to share with foreclosures and bank owned properties in Maple Grove, Minnesota

When considering the value of a foreclosure, carefully analyze 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. There are bargains with potential to make money, and many people do very well flipping foreclosures. But there are also many REOs that are not good buys and may lose money.

Ready to make an offer?

Most mortgage companies have staff dedicated to REO that you'll work with while buying REO property from them. Commonly the REO department will use a listing agent to get their REO properties listed on the local MLS.

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 regarding the condition of the property and what their process is for accepting offers. Since banks most commonly sell REO properties "as is", it may be in your best interest to include an inspection contingency in your offer that gives you time to check for hidden damage and retract the offer if you find it. If, as a buyer, you can provide documentation proving your ability to pay, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This is generally true for any real estate offer.)

Once you've submitted your offer, you can expect the bank to counter offer. At this point it will be your choice whether to accept their counter, or offer a counter to the counter offer. Your transaction might be final in one day, but that's rare. Since offers and counter offers usually allow a day or more for the other party to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer. Incentive Realty is are used to working around the schedules of this type of seller and will do everything possible to ensure there are no unnecessary delays.