What is an REO property?
It stands for “Real Estate Owned”. It basically mean the company or “bank” that first lended the money for a home buyer to buy the property has now taken it back due to non-payment. Most of the time it’s the bank that owns a property once the home owner can no longer afford to keep up the payments. Tax records will show how much the home originally cost and how much was loaned on the house.
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The following are some questions you might have regarding bank owned or REO properties:
Q. How low is the bank willing to go?
A. Not as low as most people think. The bank knows from experience that if they offer the property at a reasonable price or just slightly below market value (depending on the condition of the home) they will invariably get an offer at or close to what they are asking in a reasonable amount of time. As a buyer you can offer as low as you want to, but the bank will often ignore “low ball” offers and may not even be required to give a response back to you at all. Our suggestion is to make your best offer if you want the bank to accept your offer or at least counter it. Just a statistical fact to give some food for thought, Seattle real estate typically sells for around 97% of the asking price so keep this in mind when preparing your offer.
Q. How long does it take to get a response after I put in an offer?
A. Typically it takes about 1 week. The offer goes to the asset manager who generally has a couple of hundred files that he or she is managing, so it takes a little time. If the offer is in an acceptable range, he will in turn take it to his supervisor for approval or to issue a counter offer.
Q.Can my buyer ask for closing costs?
A. Yes, you can ask for closing costs. You can ask for anything like you would when making an offer on any other property. The best strategy to get an approval though, is to make the offer as “clean” as possible.
Q. Can we do an inspection?
A. Yes you can have a home inspection. Usually this is done within 10 days of mutual acceptance.
Q. What does as-is mean?
A. The properties were obtained through process of foreclosure and as such, the seller is not required under Washington law to provide a Seller Disclosure Statement if they get the buyer to waive the requirement. The property is being sold as-is, “what you see is what you get”. There is no guarantee of condition of property as the seller has little or no direct knowledge about the property.
REAL ESTATE SOURCES: LVHomePros.com
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