Looking for REO property or a foreclosure in Des Plaines?
Just as with any home purchase, your wisest move is to hire a professional real estate agent.
Should you have questions regarding real estate in Des Plaines, Illinois, call me or send me an e-mail.
What's an REO?
"REO" is short for Real Estate Owned. These are homes which have been through foreclosure and are currently owned by the bank or mortgage company. This differs from 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. The buyer must also be prepared to pay with cash in hand. And on top of all that, you'll accept the property entirely as is. That may comprise of current liens and even current residents that need to be put out.
A bank-owned property, on the contrary, is a more tidy and attractive proposition. The REO property did not find a buyer during foreclosure auction. The lender now owns it. The lender will deal with the elimination 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 standard 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 they are knowledgeable of.
By hiring Patti McDonald - Fresh Horizon Realty, you can rest assured knowing all parties are fulfilling Illinois state disclosure requirements.
Am I assured a low price when investing in an REO property in Des Plaines?
It is commonly presumed that any REO must be a good deal and an opportunity for easy money. This frequently isn't true. You have to be prudent about buying a repossession if your intent is to make money. While it's true that the bank is typically eager to sell it quickly, they are also motivated to get as much as they can for it.
When considering 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.
It is possible to find REOs with money-making potential, and many people do very well buying and selling foreclosures. However, there are also many REOs that are not good buys and may lose money.
Ready to make an offer?
Most banks have staff dedicated to REO that you'll work with when buying REO property from them. Usually the REO department will use a listing agent to get their REO properties listed on the local MLS.
Before making your offer, you'll want to contact either the listing agent or REO department at the bank and find out 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 unknown damage and retract the offer if you find it.
As with making any offer on real estate, providing documentation showing your ability to secure financing may make your offer more attractive, such as a pre-approval letter from a lender.
After you've presented your offer, you can expect 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 might be settled in a single 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.
2063 Frontage Rd Des Plaines, IL 60018-3011 Phone: Fax:
When considering 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.
It is possible to find REOs with money-making potential, and many people do very well buying and selling foreclosures. However, there are also many REOs that are not good buys and may lose money.
