Just as with any home purchases, your wisest move as an investor is to hire a professional Realtor.
For statistics published by Homelight, Cheryl sells properties 58% faster than the average Austin agent. Cheryl is a SFH (single family home) expert with 81% more single family home transactions than the average Austin agent. Cheryl is also a Condo expert having sold 5 more condos than the average agent.
Since 2007, Cheryl Tucker has gained the necessary experience as a Realtor and comes with tremendous Testimonials. All of the original Reviews published on this website, and many more, can be found on Google (11), Realtor (17) and Zillow (25).
What is an REO?
"REO" is real estate owned. These are homes which have gone through foreclosure and are presently possessed by the bank or mortgage company. This is unlike real estate 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 added during the foreclosure process. The buyer must also be willing to pay with cash in hand. To top everything off, you'll receive the property 100% as is. That could consist of current liens and even current tenants that need to be thrown out.
A bank-owned property, on the contrary, is a much cleaner and attractive proposition. The REO property did not find a buyer during foreclosure auction. The bank now owns it. The bank will attend to the removal of tax liens, evict occupants if needed and generally prepare 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 instance, in California, banks are not required to give a Transfer Disclosure Statement, a document that typically requires sellers to make known any defects they are informed of. Working with me as your Agent, you can rest assured knowing all parties are fulfilling Texas state disclosure requirements.
Are REO properties a bargain in Austin - Cedar Park?
It's commonly assumed that any foreclosure must be a bargain and a possibility for easy money. This frequently isn't true. You have to be very careful about buying a REO if your intent is to make money off of it. While it's true that the bank is usually anxious to sell it fast, they are also motivated to get as much as they can for it.
Look carefully at the listing and sales prices of competing 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. It is possible to find REOs with money-making potential, and many people do very well buying and selling foreclosures. But, there are also many REOs that are not good buys and not likely to turn a profit.
All set to make an offer?
Most lenders have a department dedicated to REO that you'll work with while buying REO property from them. Typically the REO department will use a listing agent to get their REO properties listed on the local MLS.
Before making your offer, I'll 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 typically 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 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 I've submitted your offer, it's customary for the bank to respond with a counter offer. Then it will be up to you to decide whether to accept their counter, or make another counter offer. Your transaction could be final in one 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.
Virtual Meetings. For years before the event of COVID, I have virtually served my clients from various cities and states across the USA. Working remotely creates a unique challenge, so my preference is to use face time during meetings. I currently use Zoom, WhatsApp and Facebook Facetime depending client preference. There's nothing like touring a home in person, however, virtual tours and photos are very helpful.
Since 2007, Cheryl Tucker Realty for an expert Realtor specializing in buying and selling, relocation, property management and home staging in Austin, Buda, Cedar Park, Hutto, Jarrel, Kyle, Lakeway, Leander, Liberty Hill, Manor, Pflugerville, Round Rock and Taylor.
To contact Cheryl Tucker, please call or text (512) 705-9010.