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Looking for REO property or a foreclosure in Londonderry?
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Purchasing a bank-owned property is not something to be taken lightly.
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What is an REO?
"REO" or Real Estate Owned are houses which have gone through foreclosure that the bank or mortgage company presently possesses. This is not the same as 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 accumulated during the foreclosure process. The buyer must also be willing to pay with cash in hand. To top everything off, you'll accept the property completely as is. That may comprise of current liens and even current residents that may require eviction.
A bank-owned property, conversely, is a much neater and attractive transaction. The REO property did not find a buyer during foreclosure auction. The bank now owns it. The lender will see to 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.
Take notice 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 typically requires sellers to make known any defects they are informed of.
By hiring RE/MAX 1st Choice, you can rest assured knowing all parties are fulfilling New Hampshire state disclosure requirements.
Am I guaranteed a low price when investing in a bank owned property in Londonderry?
It's commonly believed that any foreclosure must be a good buy and a possibility for guaranteed profit. This isn't always true. You have to be prudent about buying a REO if your intent is make a profit. Even though the bank is often eager to sell it promptly, they are also looking to get as much as they can for it.
When considering what to pay for REO property, carefully analyze 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 flipping foreclosures. However there are also many REOs that are not good buys and may not be money makers.
Prepared to make an offer?
Most banks have staff dedicated to REO that you'll work with while buying REO property from them. Commonly 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 find out as much as you can about what they know regarding the condition of the property and what their process is for accepting offers. Since banks almost always sell REO properties "as is", it's often prudent 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.
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 counter offer. From there it will be up to you to decide whether to accept their counter, or submit 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 allow a day or more for the other party to respond (and employees at a bank don't work nights or weekends) you could be looking at a week or longer. RE/MAX 1st Choice is accustomed to these situations and will work to ensure there are no unnecessary delays.
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