Buying REO property or a foreclosure in Wilkes County?
Savvy consumers will turn to a seasoned pro when considering the purchase of a foreclosed property.
If you have questions regarding real estate in Wilkes County, North Carolina, please contact us (336)667-8712; (336)984-0226 or info@HomesOfWilkes.com
What's an REO?
"REO" or Real Estate Owned are homes which have been foreclosed upon that the bank currently possesses. This is different than real estate up for foreclosure auction, either live auction or the more likely online auction.
When buying a property during a foreclosure sale (such as on the courthouse steps) you're likely to be expected to pay at least the loan balance plus any interest and other fees accrued during the foreclosure process. The buyer must also be ready to pay with cash in hand. And on top of all that, you'll have to accept the property totally as is, likely without the option of seeing it first. That may include standing liens and even current occupants that need to be put out.
A bank-owned property, on the other hand, is a more tidy and attractive deal. The REO property was unable to 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 plan for the issuance of a title insurance policy to the buyer at closing.
In North Carolina, banks are exempt from giving a Transfer Disclosure Statement,
a document that typically requires sellers to reveal any defects they are knowledgeable of.
Are REO properties a bargain in Wilkes County?
It's frequently assumed by the public that any REO must be a bargain and a possibility for easy money. This isn't always true. You have to be prudent about buying an REO if your intent is to profit from the sale. Even though the bank is usually anxious to sell it promptly, they are also looking to minimize any losses. They also often deal with buyers who will occupy the home before considering investors, who may flip the property.
When contemplating 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/updating needed to prepare the house for resale or for you to live in the property.
There are bargains with potential to make money, and many people do very well flipping foreclosures. However, there are also many REOs that are not good buys and you could lose money.
Time to make an offer?
Most banks 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 often use a listing agent who will list that property on the local MLS. Homes Of Wilkes will have copies of all these listings and can arrange for you to get new REO's as they come on the market.
Before making your offer, you'll want to have your Buyer's Agent contact either the listing agent and find out as much as they can about their knowledge concerning the condition of the property and what their process is for taking offers. Since banks almost always sell REO properties "as is", it's prudent to do any and all inspections during your Due Diligence Period to check for hidden damage and retract the offer if you find it not to be in the condition you believed it to be when you made your offer. North Carolina is a "Buyer Beware" state, so it's always the buyer's responsibility to confirm the condition of a property, not the seller's. This is essential in an REO, as often no one really knows true condition of these properties. As with making any offer on real estate, providing documentation showing your ability to pay is essential, in the form of a pre-approval (or pre-qualification) letter from a lender. In fact, most REO departments won't even look at an offer that doesn't include this documentation. Just one more reason for having this first step in the buying process in line.
Once you've submitted your offer, you can expect the bank to respond with at least one counter offer. From there it will be up to you to decide whether to accept their counter, or offer a counter to their counter offer. Your Buyer Agent will assist you with this and help you decide what best suits your needs and budget and possibly if and when you want to accept the banks counter, or back away from the property all together. Your transaction could 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. For this reason, closings on REO/foreclosures may take a little longer to close.
Homes Of Wilkes REALTORS have worked with many REO sales and are ready to help you if that's the route you plan to take. If you'd like to stay notified of foreclosures as they come on the market, just complete the form below and you'll be notified by email the minute either a new foreclosure comes on the market, has a price reduction or other change, or comes back on the market after going under contract that did not go to closing.
Complete the following form and you'll receive foreclosures as they come on the market. Your information will be kept strictly confidential.