REAL ESTATE AGENTS
FAQ: Frequently Asked Questions about Foreclosures?
Q: What does "REO" mean?
A: Real Estate Owned. It's the term the banks use to identify their foreclosure properties.
Q: What is "Foreclosure"?
A: A procedure whereby property pledged as security for a debt is sold to pay the debt in event of default in payments or terms. If a homeowner with a mortgage on their property cannot make payments on that loan, then the lender will file a lawsuit to take back the property for non-payment of the loan. This action is called foreclosure.
Q: How is a HUD property different from any other foreclosure?
A: HUD homes are FHA-insured loan foreclosures. When someone with a HUD insured mortgage can't meet the payments, the lender forecloses on the home; HUD pays the lender what is owed; and HUD takes ownership of the home. Then it is sold at market value as quickly as possible.
Q: How are foreclosure properties identified on the MLS?
A: They are listed just like any other property, however, may have limited information. The best way to find them is by working with a real estate agent who specializes in this kind of home, or by searching the web.
Q: Doesn't the amount owed on the property determine what the bank will sell it for? Won't the banks sell them for less?
A: No. When negotiating with an asset manager at a bank for the purchase of a foreclosure, keep in mind that this is a professional seller. A good asset manager will order appraisals and hire an agent to advise them about the property's condition and value. Then they price them accordingly.
Q: Will the banks repair the properties that are distressed?
A: Sometimes. The asset manager in charge of the property will confer with his broker prior to listing it to determine if it is a good candidate for repair or rehab. He will then proceed with a marketing strategy - either "as-is" or "repaired". Repairs are cosmetic, paint, carpet, re-grouting of tile, replace a torn screen, a cracked window or a mirror in which the silver backing is coming off, and reconditioning of appliances.
Q: How are negotiations handled?
A: Once you have determined you wish to make an offer on a bank owned home, you instruct a professional real estate agent experience in Bank Owned Properties to write the offer. The offer is then presented to the Bank Seller. The Bank Seller will give him a verbal acceptance, counteroffer or rejection. All negotiations are conducted verbally until a final agreement is reached between you and the Bank seller. Once that agreement is reached either the original contract offer is amended, or a new contract is prepared containing the agreed upon terms.
"Denny Stone Treats your REO Properties as If They Were Her Own!"
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