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Interested in buying an REO property or a foreclosure in Lafayette, Indiana or surrounding communities?
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Investing in a bank-owned property is not something to be taken casually. If you have questions about real estate in Lafayette, Indiana, call me or send me an e-mail. |
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What is an REO?"REO" is short for Real Estate Owned. These are properties which have been foreclosed upon and are currently owned by the bank or mortgage company. This differs from a property 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 able to pay with cash in hand. And on top of all that, you'll accept the property 100% as is. That possibly will consist of existing liens and even current occupants that need to be evicted.
A bank-owned property, by contrast, is a much neater and attractive deal. The REO property was unable to find a buyer during foreclosure auction. The lender now owns it. The bank will handle the removal of tax liens, evict occupants if needed and generally organize for the issuance of a title insurance policy to the buyer at closing.
Take notice that REOs may be exempt from standard disclosure requirements. For instance, in California, banks are not required to give a Transfer Disclosure Statement, a document that ordinarily requires sellers to tell you about any defects of which they are informed. By hiring Greg Dexter, you can rest assured knowing all parties are fulfilling Indiana state disclosure requirements.
Are REO properties a bargain in Tippecanoe County?It's commonly believed that any foreclosure must be a steal and an opportunity for guaranteed profit. This isn't necessarily the case. You have to be very careful about buying a REO if your intent is make a profit. Even though the bank is typically anxious to offload it soon, they are also motivated to get as much as they can for it.
 Look carefully at the listing and sales prices of competing homes in the neighborhood when making an offer on 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 buying and selling foreclosures. Still there are also many REOs that are not good buys and may not be money makers.
Prepared to make an offer?Most lenders have staff 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.
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 regarding the condition of the property and what their process is for receiving offers. Since banks most commonly sell REO properties "as is", it's often prudent to include an inspection contingency in your offer that gives you time to check for unseen damage and cancel the offer if you find it. If, as a buyer, you can provide documentation showing your ability to pay, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This is generally true for any real estate offer.)
Once you've submitted your offer, it's customary for 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. Your deal could be settled in a single day, but that's usually not the case. Since offers and counter offers usually give the other party a day or longer to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer. Greg Dexter is accustomed to these situations and will work to ensure there are no undue delays.
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Today's Rates:
| 30-yr Fixed | 3.87% | 4% | | 15-yr Fixed | 3.16% | 3.33% | | 1-yr Adj | 2.78% | 3.45% |
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