Making an offer on REO property or a foreclosure in Frisco?


	Just as with any property purchase, your wisest move is to hire a professional real estate agent. If you have any questions about real estate in Frisco, Texas, call me or send me an e-mail.

What's an REO?

"REO" stands for Real Estate Owned. These are houses which have been through foreclosure that the bank or mortgage company now possesses. This is unlike real estate up for foreclosure auction. Bo Kinkov William Davis Realty has experience to share with foreclosures and bank owned properties in Frisco, Texas

Bo Kinkov William Davis Realty has experience to share with foreclosures and bank owned properties in Frisco, Texas

If you buy 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. You must also be prepared to pay with cash in hand. To top everything off, you'll get the property totally as is. That could include existing liens and even current tenants that need to be removed.

A bank-owned property, on the contrary, is a much cleaner and attractive transaction. The REO property didn't find a buyer during foreclosure auction. Now the bank owns it. The bank will take care of the removal of tax liens, evict occupants if needed and generally arrange for the issuance of a title insurance policy to the buyer at closing.

Note 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 usually requires sellers to disclose any defects they are informed of. By hiringBo Kinkov William Davis Realty, you can rest assured knowing all parties are fulfilling Texas state disclosure requirements.

Are REO properties a bargain in Frisco?

It is sometimes thought that any foreclosure must be a steal and an opportunity for easy money. This isn't always true. You have to be very careful about buying a repossession if your intent is make money. While it's true that the bank is typically eager to sell it promptly, they are also looking to minimize any losses.

Bo Kinkov William Davis Realty has experience to share with foreclosures and bank owned properties in Frisco, Texas

When contemplating the value of 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. 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 may lose money.

Time to make an offer?

Most mortgage companies have a department dedicated to REO that you'll work with while 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 learn as much as you can about what they know regarding the condition of the property and what their process is for getting offers. Since banks usually 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 terminate 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.)

Once you've presented your offer, you can expect the bank to counter offer. From there it will be your choice whether to accept their counter, or make another counter offer. Be aware, you'll be working with a process that most likely involves a group of people at the bank, and they don't work evenings or weekends. It's typical for the process of offers and counter offers to take days or even weeks.