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Looking for REO property or a foreclosure in Missoula?
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Foreclosed upon and bank owned property purchases require the assistance of an experience professional.
Should you have any questions about real estate in Missoula, Montana, call me or send me an e-mail.
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What is an REO?
"REO" is an abbreviation for Real Estate Owned. These are properties which have gone through foreclosure that the bank or mortgage company now possesses. 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 amassed during the foreclosure process. You must also be ready to pay with cash in hand. And on top of all that, you'll accept the property entirely as is. That possibly will include current liens and even current tenants that need to be expelled.
A bank-owned property, on the other hand, is a much neater and attractive option. The REO property did not find a buyer during foreclosure auction. Now the lender owns it. The lender will deal with the elimination of tax liens, evict occupants if needed and generally prepare for the issuance of a title insurance policy to the buyer at closing.
Note that REOs may be exempt from typical disclosure requirements.
In California, for example, banks do not have to give a Transfer Disclosure Statement,
a document that typically requires sellers to disclose any defects of which they are aware.
By hiring Windermere Real Estate, you can rest assured knowing all parties are fulfilling Montana state disclosure requirements.
Are REO properties a bargain in Missoula County?
It's commonly assumed that any REO must be a good buy and a chance for guaranteed profit. This isn't necessarily the case. You have to be prudent about buying a repossession if your intent is make a profit. Even though the bank is often eager to sell it fast, they are also looking to get as much as they can for it.
When considering the value of 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.
It is possible to find REOs with money-making potential, and many people do very well buying and selling foreclosures. However there are also many REOs that are not good buys and not likely to turn a profit.
Prepared to make an offer?
Most lenders have staff dedicated to REO that you'll work with while buying REO property from them. To get their properties advertised on the local MLS, the lender will often contract with a listing agent.
Before making your offer, you'll want to contact either the listing agent or REO department at the bank and find out as much as you can about their knowledge concerning the condition of the property and what their process is for getting offers. Since banks almost always 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.
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.
After you've presented your offer, it's customary for the bank to respond with a counter offer. At this point it will be up to you to decide whether to accept their counter, or submit another counter offer.
Realize, you'll be working with a process that usually involves multiple people at the bank, and they don't work evenings or weekends. It's typical for the process of offers and counter offers to take days or even weeks. Windermere Real Estate is accustomed to these situations and will work to ensure there are no undue delays.
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