Interested in REO property or a foreclosure in New Orleans?
Investing in a bank-owned property is not something to be taken lightly.
If you have questions regarding real estate in New Orleans, Louisiana, call me
or send me an e-mail
What's an REO?
"REO" or Real Estate Owned are properties which have completed the foreclosure process that the bank or mortgage company currently owns. 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. You must also be ready to pay with cash in hand. Finally, you'll accept the property totally as is. That might involve prevailing liens and even current residents that need to be put out.
A bank-owned property, conversely, is a more tidy and attractive proposition. The REO property didn't find a buyer during foreclosure auction. The lender now owns it. The bank will deal with 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.
Note that REOs may be exempt from standard disclosure requirements.
For example, in California, banks are exempt from giving a Transfer Disclosure Statement,
a document that normally requires sellers to disclose any defects of which they are aware.
By hiring alex-cate realty, LLC, you can rest assured knowing all parties are fulfilling Louisiana state disclosure requirements.
Are REO properties a bargain in New Orleans?
It is commonly assumed that any foreclosure must be a good buy and a possibility for easy money. This simply isn't true. You have to be cautious about buying a repossession if your intent is to make money. Even though the bank is typically anxious to sell it promptly, they are also motivated to minimize any losses.
When contemplating 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 buying foreclosures. However, there are also many REOs that are not good buys and not likely to turn a profit.
Prepared to make an offer?
Most lenders have a department dedicated to REO that you'll work with when 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 discover as much as you can about what they know concerning the condition of the property and what their process is for receiving offers. Since banks typically sell REO properties "as is", you'll want to be sure and include an inspection contingency in your offer that gives you time to check for unseen 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 goes for any real estate offer.)
After you've presented your offer, you can expect the bank to make a counter offer. Then it will be your decision whether to accept their counter, or submit another counter offer.
Your transaction might be final in one 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. alex-cate realty, LLC is accustomed to these situations and will work to ensure there are no undue delays.