Looking for REO property or a foreclosure in Charlotte?
Just as with any property purchase, your smartest move is to hire a professional real estate agent.
Should you have any questions about real estate in Charlotte, North Carolina, call me
or send me an e-mail
What's an REO?
"REO" means Real Estate Owned. These are homes which have been foreclosed upon and are presently possessed by the bank or mortgage company. This is different than 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 accrued during the foreclosure process. The buyer must also be able to pay with cash in hand. Finally, you'll accept the property completely as is. That could include prevailing liens and even current residents that need to be expelled.
A bank-owned property, on the contrary, is a much neater and attractive deal. The REO property didn't find a buyer during foreclosure auction. The bank now owns it. The lender will take care of the elimination of tax liens, evict occupants if needed and generally organize 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 instance, in California, banks are not required to give a Transfer Disclosure Statement,
a document that ordinarily requires sellers to reveal any defects they are knowledgeable of.
By hiring Thompson-Smith, Inc., you can rest assured knowing all parties are fulfilling North Carolina state disclosure requirements.
Am I assured a bargain when purchasing an REO property in Charlotte?
It is commonly thought that any foreclosure must be a good deal and a chance for guaranteed profit. This isn't necessarily the case. You have to be prudent about buying a REO if your intent is to make a profit. Even though the bank is usually eager to offload it promptly, they are also motivated to get as much as they can for it.
Look closely at the listing and sales prices of competing properties in the neighborhood when considering the purchase of 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. However, there are also many REOs that are not good buys and may lose money.
Prepared to make an offer?
Most banks have staff dedicated to REO that you'll work with in buying REO property from them. Typically 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 learn as much as you can about their knowledge regarding the condition of the property and what their process is for receiving offers. Since banks most commonly 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 retract 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 make a counter offer. Then it will be up to you to decide whether to accept their counter, or submit another counter offer.
Your deal might be settled in a single 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.