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Purchasing REO property or a foreclosure in Upstate SC?
Smart consumers will turn to a seasoned pro when considering the purchase of a foreclosed property. For more information, you can
through our website or
. We're glad to address questions you have about real estate foreclosures.
What's an REO?
"REO" means Real Estate Owned. These are homes which have been foreclosed upon that the bank or mortgage company presently owns. This is different than 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 accrued during the foreclosure process. You must also be willing to pay with cash in hand. Finally, you'll receive the property totally as is. That possibly could involve existing liens and even current occupants that need to be evicted.
A bank-owned property, on the other hand, is a much cleaner and attractive deal. The REO property was unable to 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 organize for the issuance of a title insurance policy to the buyer at closing.
Note that REOs may be exempt from normal disclosure requirements. In California, for example, banks do not have to give a Transfer Disclosure Statement, a document that usually requires sellers to make known any defects they are aware of. By hiring Golden Corner Realty & Dev. Inc., you can rest assured knowing all parties are fulfilling South Carolina state disclosure requirements.
Am I assured a good deal when investing in a bank owned property in the Upstate?
It's sometimes believed that any REO must be a steal and an opportunity for easy money. This isn't necessarily true. You have to be cautious about buying a REO if your intent is to make a profit. While it's true that the bank is usually eager 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 similar properties 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.
Ready to make an offer?
Most mortgage companies have staff dedicated to REO that you'll work with when buying REO property from them. Typically the REO department will use a listing agent to get their REO properties listed on the local MLS.
Before 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 about 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 retract the offer if you find it. As with making any offer on real estate, providing documentation proving your ability to pay may make your offer more attractive, such as a pre-approval letter from a lender.
Once you've made your offer, it's customary for the bank to counter offer. From there it will be your decision whether to accept their counter, or submit another counter offer. Understand, you'll be working with a process that usually involves several people at the bank, and they don't work evenings or weekends. It's not unusual for there to be days or even weeks of going back and forth. Golden Corner Realty & Dev. Inc. is used to working around the schedules of this type of seller and will do everything possible to ensure there are no undue delays.