Interested in REO property or a foreclosure in Dallas?
Just as with any property purchase, your smartest move is to hire a professional real estate agent.
If you have any questions regarding real estate in Dallas, Texas, call me
or send me an e-mail
What's an REO?
"REO" or Real Estate Owned are properties which have been foreclosed upon and are presently owned by the bank or mortgage company. This is unlike real estate 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 accumulated during the foreclosure process. You must also be prepared to pay with cash in hand. And on top of all that, you'll receive the property entirely as is. That possibly will include current liens and even current tenants that need to be thrown out.
A bank-owned property, conversely, is a much neater and attractive proposition. 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 arrange 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 Nevada, it is optional for foreclosures to have a Property Disclosure Statement,
a document that normally requires sellers to disclose any defects of which they are informed.
By hiring Liliana Hay, you can rest assured knowing all parties are fulfilling Texas state disclosure requirements.
Are REO properties a bargain in Dallas?
It is frequently presumed that any REO must be a bargain and a chance for guaranteed profit. This simply isn't true. You have to be very careful about buying a repossession if your intent is to make money. While it's true that the bank is often anxious to sell it quickly, they are also motivated to minimize any losses.
Look closely at the listing and sales prices of comparable homes in the neighborhood when considering the purchase of an REO. And factor in any repairs or upgrades necessary to prepare the house for resale or moving in.
The bargains with money making potential exist, and many people do very well flipping foreclosures. However, there are also many REOs that are not good buys and not likely to turn a profit.
Ready to make an offer?
Most banks have a department dedicated to REO that you'll work with when buying REO property from them. To get their properties advertised on the local MLS, the lender will frequently 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 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", you may want to include an inspection contingency in your offer that gives you time to check for unknown damage and terminate 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 goes for any type of real estate offer.)
Once you've made your offer, it's customary for the bank to make a counter offer. From there it will be your choice whether to accept their counter, or make another counter offer.
Understand, you'll be contending with a process that usually involves a group of people at the bank, and they don't work evenings or weekends. It's not unusual for the process of offers and counter offers to take days or even weeks. Liliana Hay is accustomed to these situations and will work to ensure there are no undue delays.