Buying REO property or a foreclosure in State College?
Investing in a bank-owned property is not something to be taken casually.
What's an REO?
"REO" or Real Estate Owned are houses which have been foreclosed upon that the bank or mortgage company now owns. This is not the same as a property up for foreclosure auction.
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 able to pay with cash in hand. To top everything off, you'll get the property entirely as is. That possibly could consist of existing liens and even current tenants that need to be evicted.
A bank-owned property, conversely, is a much cleaner and attractive transaction. The REO property was unable to 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 arrange 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 Nevada, it is optional for foreclosures to have a Property Disclosure Statement,
a document that typically requires sellers to make known any defects they are aware of.
By hiring Corman Associates, Inc., you can rest assured knowing all parties are fulfilling Pennsylvania state disclosure requirements.
Is REO property in State College a bargain?
It's commonly believed that any REO must be a bargain and an opportunity for easy money. This isn't always the case. You have to be prudent about buying a repossession if your intent is profit from the sale. While it's true that the bank is usually eager to offload it fast, they are also looking to get as much as they can for it.
Look closely at the listing and sales prices of similar homes in the neighborhood when making an offer on an REO. And factor in any repairs or remodeling necessary to prepare the house for resale or moving in.
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 not likely to turn a profit.
Prepared to make an offer?
Most mortgage companies have a department dedicated to REO that you'll work with while buying REO property from them. To get their properties advertised on the local MLS, the lender will often 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 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 unknown damage and cancel 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.
After you've presented your offer, you can expect the bank to respond with a counter offer. From there it will be up to you to decide whether to accept their counter, or make another counter offer.
Your deal might be settled in one day, but that's rare. 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. Corman Associates, Inc. is are used to working around the schedules of this type of seller and will do everything possible to ensure there are no unnecessary delays.
Corman Associates, Inc. 1951 Pine Hall Road State College, PA 16801
Look closely at the listing and sales prices of similar homes in the neighborhood when making an offer on an REO. And factor in any repairs or remodeling necessary to prepare the house for resale or moving in.
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 not likely to turn a profit.
