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Purchasing REO property or a foreclosure in Las Vegas?
Foreclosed upon and bank owned property purchases require the assistance of an experience professional.
What is an REO?
"REO" or Real Estate Owned are houses which have completed the foreclosure process that the bank or mortgage company now possesses. This is different than a property up for foreclosure auction.
If you buy a property during a foreclosure sale, you must pay at least the loan balance plus any interest and other fees added during the foreclosure process. The buyer must also be prepared to pay with cash in hand. And on top of all that, you'll get the property totally as is. That possibly may comprise of prevailing liens and even current tenants that may require removal.
A bank-owned property, conversely, is a more tidy and attractive deal. The REO property did not find a buyer during foreclosure auction. Now the bank owns it. The lender will handle the elimination 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. In California, for example, banks do not have to give a Transfer Disclosure Statement, a document that typically requires sellers to reveal any defects of which they are aware. By hiring Mesa Realty, you can rest assured knowing all parties are fulfilling Nevada state disclosure requirements.
Is REO property in Las Vegas a bargain?
It's sometimes thought that any foreclosure must be a bargain and an opportunity for easy money. 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 typically anxious to sell it promptly, they are also looking to get as much as they can for it.
When pondering what to pay for REO property, you need to look closely at 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. There are bargains with potential to make money, and many people do very well flipping foreclosures. Still there are also many REOs that are not good buys and may lose money.
Prepared to make an offer?
Most banks have staff dedicated to REO that you'll work with in buying REO property from them. Typically 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 concerning the condition of the property and what their process is for taking offers. Since banks usually sell REO properties "as is", it's often prudent 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. 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.
Once you've made your offer, you can expect the bank to respond with a counter offer. At this point it will be your choice whether to accept their counter, or make another counter offer. Your deal could be final 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.