Interested in REO property or a foreclosure in Fresno?

What's an REO?

"REO" or Real Estate Owned are homes which have been foreclosed upon that the bank or mortgage company currently possesses. This differs from 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 ready to pay with cash in hand. And on top of all that, you'll accept the property 100% as is. That could involve standing liens and even current tenants that may require eviction.

A bank-owned property, on the other hand, is a much cleaner and attractive transaction. The REO property didn't find a buyer during foreclosure auction. The bank now owns it. The bank will see to 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 normal disclosure requirements. In California, for example, banks are exempt from giving a Transfer Disclosure Statement, a document that usually requires sellers to reveal any defects they are knowledgeable of. By hiring Hale Realty, you can rest assured knowing all parties are fulfilling California state disclosure requirements.

Am I guaranteed a good deal when purchasing an REO property in Fresno?

It is occasionally thought that any REO must be a good deal and a chance for guaranteed profit. This isn't necessarily true. 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 anxious 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. There are bargains with potential to make money, and many people do very well buying foreclosures. However, there are also many REOs that are not good buys and may lose money.

Prepared to make an offer?

Most banks 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 discover as much as you can about their knowledge regarding the condition of the property and what their process is for getting offers. Since banks typically 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 cancel 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 is generally true for any real estate offer.)

Once you've presented your offer, it's customary for the bank to respond with a counter offer. Then it will be your decision whether to accept their counter, or make another counter offer. Realize, you'll be contending with a process that usually involves several people at the bank, and they don't work evenings or weekends. It's not unusual for the process of offers and counter offers to take days or even weeks.