Buying REO property or a foreclosure in Colorado Springs?


	Savvy consumers will turn to a seasoned pro when considering the purchase of a foreclosed property. If you have questions regarding real estate in Colorado Springs, Colorado, call me or send me an e-mail.

What's an REO?

"REO" is Real Estate Owned. These are homes which have been through foreclosure that the bank or mortgage company currently possesses. This differs from real estate up for foreclosure auction. The Master's Real Estate Group has experience to share with foreclosures and bank owned properties in Colorado Springs, Colorado

The Master's Real Estate Group has experience to share with foreclosures and bank owned properties in Colorado Springs, Colorado

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. The buyer must also be ready to pay with cash in hand. Finally, you'll accept the property completely as is. That possibly may consist of existing liens and even current denizens that may require eviction.

A bank-owned property, on the other hand, is a much neater and attractive transaction. The REO property did not find a buyer during foreclosure auction. The lender now owns it. The lender will deal with 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 typical disclosure requirements. For example, in California, banks are exempt from giving a Transfer Disclosure Statement, a document that ordinarily requires sellers to tell you about any defects of which they are aware. By hiring The Master's Real Estate Group, you can rest assured knowing all parties are fulfilling Colorado state disclosure requirements.

Are REO properties a bargain in El Paso County?

It is frequently assumed that any foreclosure must be a steal and a chance for easy money. This frequently isn't true. 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 quickly, they are also motivated to minimize any losses.

The Master's Real Estate Group has experience to share with foreclosures and bank owned properties in Colorado Springs, Colorado

Look carefully at the listing and sales prices of comparable homes in the neighborhood when considering the purchase of an REO. And factor in any repairs or upgrades necessary to prepare the house for resale or moving in. It is possible to find REOs with money-making potential, and many people do very well buying foreclosures. However 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. To get their properties advertised on the local MLS, the lender will often use a listing agent.

Before making your offer, you'll want to contact either the listing agent or REO department at the bank and find out 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 may be in your best interest to include an inspection contingency in your offer that gives you time to check for hidden damage and retract 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 holds for any type of real estate offer.)

Once you've submitted your offer, you can expect the bank to make a counter offer. From there it will be your choice whether to accept their counter, or submit another counter offer. Understand, you'll be contending with a process that probably involves several people at the bank, and they don't work evenings or weekends. It's typical for there to be days or even weeks of going back and forth.