Purchasing REO property or a foreclosure in Houston?


	Foreclosed upon and bank owned property purchases require the assistance of an experience professional. Should you have questions regarding real estate in Houston, Texas, call me or send me an e-mail.

What's an REO?

"REO" is short for Real Estate Owned. These are houses which have completed the foreclosure process and are now possessed by the bank or mortgage company. This is unlike real estate up for foreclosure auction. Allen Brothers has experience to share with foreclosures and bank owned properties in Houston, Texas

Allen Brothers has experience to share with foreclosures and bank owned properties in Houston, Texas

If you buy a property during a foreclosure sale, you must pay at least the loan balance plus any interest and other fees amassed during the foreclosure process. You must also be willing to pay with cash in hand. To top everything off, you'll get the property entirely as is. That possibly will comprise of prevailing liens and even current occupants that may require removal.

A bank-owned property, conversely, is a much neater and attractive transaction. The REO property was unable to find a buyer during foreclosure auction. The lender now owns it. The bank 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 typical disclosure requirements. For example, in Texas, it is optional for foreclosures to have a Property Disclosure Statement, a document that ordinarily requires sellers to make known any defects of which they are knowledgeable. By hiring Allen Brothers, you can rest assured knowing all parties are fulfilling Texas state disclosure requirements.

Am I guaranteed a good deal when purchasing an REO property in Houston?

It's commonly believed that any foreclosure must be a bargain and an opportunity for guaranteed profit. This frequently isn't true. You have to be prudent about buying a REO if your intent is profit from the sale. Even though the bank is usually anxious to sell it promptly, they are also looking to minimize any losses.

Allen Brothers has experience to share with foreclosures and bank owned properties in Houston, Texas

When considering the value of a foreclosure, 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. There are bargains with potential to make money, and many people do very well flipping foreclosures. But there are also many REOs that are not good buys and may not be money makers.

Time to make an offer?

Most mortgage companies have a department 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 typically hire a listing agent.

Prior to 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 concerning the condition of the property and what their process is for accepting offers. Since banks most commonly 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 unknown damage and cancel the offer if you find it. If, as a buyer, you can provide documentation proving 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.)

After you've presented your offer, it's customary for the bank to counter offer. Then it will be up to you to decide whether to accept their counter, or submit another counter offer. Your transaction might be settled in a single day, but that's rare. 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. Allen Brothers is accustomed to these situations and will work to ensure there are no undue delays.