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Purchasing REO property or a foreclosure in Miami Beach?
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Foreclosed upon and bank owned property purchases require the assistance of an experience professional. |
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What's an REO?"REO" or Real Estate Owned are properties which have completed the foreclosure process that the bank or mortgage company now owns. This is unlike real estate 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 accumulated during the foreclosure process. You must also be able to pay with cash in hand. Finally, you'll get the property 100% as is. That could include prevailing liens and even current occupants that may require eviction.
A bank-owned property, on the other hand, is a more tidy and attractive deal. The REO property did not find a buyer during foreclosure auction. The bank now owns it. The lender will deal with 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.
Note that REOs may be exempt from standard disclosure requirements. For example, in California, banks do not have to give a Transfer Disclosure Statement, a document that typically requires sellers to reveal any defects of which they are knowledgeable. By hiring Coldwell Banker Real Estate, you can rest assured knowing all parties are fulfilling Florida state disclosure requirements.
Am I guaranteed a good deal when investing in a bank owned property in Miami Beach?It is occasionally presumed that any REO must be a steal and an opportunity for easy money. This isn't necessarily true. You have to be cautious about buying a repossession if your intent is make a profit. While it's true that the bank is typically eager to offload it fast, they are also motivated to minimize any losses.
 Look carefully at the listing and sales prices of comparable properties 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. The bargains with money making potential exist, and many people do very well flipping foreclosures. But there are also many REOs that are not good buys and may lose money.
Time to make an offer?Most mortgage companies have staff 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 frequently 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 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 hidden damage and terminate the offer if you find it. As with making any offer on real estate, your offer may be more attractive if you can include documentation of your ability to pay, such as a pre-approval letter from a lender.
Once you've made your offer, it's customary for the bank to counter offer. Then it will be up to you to decide whether to accept their counter, or offer a counter to the counter offer. Your deal could 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. Coldwell Banker Real Estate is are used to working around the schedules of this type of seller and will do everything possible to ensure there are no undue delays.
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