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Buying REO property or a foreclosure in Atlanta?
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Just as with any home purchase, your wisest move is to hire a professional Realtor. For more information, you can contact me through my site or e-mail me. I'm glad to answer any questions you have regarding real estate foreclosures. |
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What is an REO?"REO" stands for Real Estate Owned. These are properties which have gone through foreclosure that the bank or mortgage company now owns. This is different than 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 amassed 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 100% as is. That possibly may include existing liens and even current denizens that may require expulsion.
A bank-owned property, on the other hand, is a much cleaner and attractive transaction. The REO property didn't find a buyer during foreclosure auction. Now the lender owns it. The lender will attend to the removal of tax liens, evict occupants if needed and generally arrange for the issuance of a title insurance policy to the buyer at closing.
Do be aware that REOs may be exempt from normal disclosure requirements. For instance, in California, banks are exempt from giving a Transfer Disclosure Statement, a document that typically requires sellers to make known any defects they are informed of. By hiring Chapman Hall Realtors in Atlanta, you can rest assured knowing all parties are fulfilling Georgia state disclosure requirements.
Am I assured a good deal when buying a bank owned property in Atlanta?It is frequently assumed that any REO must be a bargain and an opportunity for guaranteed profit. This frequently isn't true. You have to be cautious about buying a REO if your intent is profit from the sale. While it's true that the bank is usually eager to sell it quickly, they are also motivated to get as much as they can for it.
 When considering what to pay for REO property, 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. The bargains with money making potential exist, 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.
All set to make an offer?Most banks have a department dedicated to REO that you'll work with in buying REO property from them. Usually 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 getting offers. Since banks almost always sell REO properties "as is", you may want to include an inspection contingency in your offer that gives you time to check for hidden damage and cancel the offer if you find it. As with making any offer on real estate, you'll make your offer more attractive if you can include documentation of your ability to pay, such as a pre-approval letter from a lender.
Once you've made your offer, you can expect the bank to respond with a counter offer. From there it will be your decision whether to accept their counter, or submit another counter offer. Understand, you'll be dealing with a process that usually 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 going back and forth.
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