Looking for REO property or a foreclosure in West Palm Beach?

What's an REO?

"REO" stands for Real Estate Owned. These are houses which have been foreclosed upon and are now owned by the bank or mortgage company. This is different than 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 added during the foreclosure process. You must also be willing to pay with cash in hand. And on top of all that, you'll get the property completely as is. That possibly could include prevailing liens and even current occupants that need to be put out.

A bank-owned property, on the contrary, is a much neater and attractive deal. The REO property didn't find a buyer during foreclosure auction. Now the lender owns it. The bank will see to 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.

Do be aware that REOs may be exempt from normal disclosure requirements. For instance, in California, banks do not have to give a Transfer Disclosure Statement, a document that normally requires sellers to make known any defects of which they are knowledgeable. By hiring J. Briann Realty Group, Inc., you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.

Are REO properties a bargain in West Palm Beach?

It is sometimes believed that any foreclosure must be a steal and an opportunity for easy money. This often isn't true. You have to be prudent about buying a REO if your intent is to make money. Even though the bank is usually anxious to sell it promptly, they are also looking to minimize any losses.

When contemplating the value of 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. The bargains with money making potential exist, and many people do very well buying and selling foreclosures. But, there are also many REOs that are not good buys and not likely to turn a profit.

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 discover as much as you can about their knowledge regarding the condition of the property and what their process is for accepting offers. Since banks most commonly 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 withdraw the offer if you find it. If, as a buyer, you can provide documentation demonstrating 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 up to you to decide whether to accept their counter, or offer a counter to the counter offer. Realize, you'll be contending with a process that generally involves a group of people at the bank, and they don't work evenings or weekends. It's not uncommon for the process of offers and counter offers to take days or even weeks.