Looking for REO property or a foreclosure in New Haven?
Foreclosed upon and bank owned property purchases require the assistance of an experience professional.
If you have questions regarding real estate in New Haven, Connecticut, call us
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What's an REO?
"REO" or Real Estate Owned are houses which have gone through foreclosure that the bank or mortgage company presently owns. This is different than 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 accrued during the foreclosure process. The buyer must also be willing to pay with cash in hand. Finally, you'll receive the property entirely as is. That might comprise of current liens and even current residents that may require expulsion.
A bank-owned property, conversely, is a more tidy and attractive option. The REO property didn't find a buyer during foreclosure auction. Now the lender owns it. The lender will see to 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.
Take notice that REOs may be exempt from typical disclosure requirements.
For example, in California, banks are exempt from giving a Transfer Disclosure Statement,
a document that typically requires sellers to reveal any defects of which they are aware.
By hiring Planet Realty, LLC, you can rest assured knowing all parties are fulfilling Connecticut state disclosure requirements.
Am I assured a bargain when purchasing a bank owned property in New Haven?
It's frequently thought that any REO must be a good deal and a chance for easy money. This isn't necessarily the case. You have to be cautious about buying a REO if your intent is to make money. While it's true that the bank is typically eager to sell it promptly, they are also looking 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 flipping foreclosures. Still, there are also many REOs that are not good buys and not likely to turn a profit.
Time to make an offer?
Most banks have staff 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 frequently contract with a listing agent.
Prior to making your offer, you'll want to contact either the listing agent or REO department at the bank and discover as much as you can about what they know about the condition of the property and what their process is for taking offers. Since banks most commonly 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 withdraw the offer if you find it.
If, as a buyer, you can provide documentation demonstrating your ability to secure financing, such as a pre-approval letter from a lender, your offer will be more attractive and likely be accepted. (This holds for any type of real estate offer.)
Once you've submitted your offer, you can expect the bank to counter offer. At this point it will be your decision whether to accept their counter, or offer a counter to the counter offer.
Be aware, you'll be contending with a process that generally involves a group of people at the bank, and they don't work evenings or weekends. It's quite common for the process of offers and counter offers to take days or even weeks.