Buying REO property or a foreclosure in Boulder?


	Foreclosed upon and bank owned property purchases require the assistance of an experience professional. If you have questions about real estate in Boulder, Colorado, call me or send me an e-mail.

What is an REO?

"REO" or Real Estate Owned are homes which have been through foreclosure and are now possessed by the bank or mortgage company. This is different than real estate up for foreclosure auction. Prudential Rocky Mountain Realtors has experience to share with foreclosures and bank owned properties in Boulder, Colorado

Prudential Rocky Mountain Realtors has experience to share with foreclosures and bank owned properties in Boulder, Colorado

When buying 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 prepared to pay with cash in hand. Finally, you'll receive the property totally as is. That possibly may include existing liens and even current denizens that may require expulsion.

A bank-owned property, on the other hand, is a more tidy and attractive deal. The REO property didn't find a buyer during foreclosure auction. Now the lender owns it. The lender will take care of 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.

Take notice that REOs may be exempt from typical disclosure requirements. For example, in Texas, it is optional for foreclosures to have a Property Disclosure Statement, a document that ordinarily requires sellers to disclose any defects they are informed of. By hiring Prudential Rocky Mountain Realtors, you can rest assured knowing all parties are fulfilling Colorado state disclosure requirements.

Are REO properties a bargain in Boulder County?

It's commonly believed that any REO must be a bargain and an opportunity for guaranteed profit. This simply isn't true. You have to be prudent about buying a REO if your intent is make a profit. 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.

Prudential Rocky Mountain Realtors has experience to share with foreclosures and bank owned properties in Boulder, Colorado

Look carefully at the listing and sales prices of comparable homes 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 buying foreclosures. Still there are also many REOs that are not good buys and may lose money.

All set to make an offer?

Most mortgage companies have a department dedicated to REO that you'll work with in buying REO property from them. To get their properties advertised on the local MLS, the lender will typically use a listing agent.

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 what they know about the condition of the property and what their process is for receiving offers. Since banks almost always sell REO properties "as is", it's often prudent to include an inspection contingency in your offer that gives you time to check for unseen damage and cancel the offer if you find it. If, as a buyer, you can provide documentation showing 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 goes for any type of real estate offer.)

After you've presented your offer, you can expect the bank to make a counter offer. Then it will be your choice whether to accept their counter, or offer a counter to the counter offer. Your deal might 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.