FAQ’s
I hear these BUZZ words; REO, Bank Owned, Foreclosure, short-sale. What are the differences?
Let me explain the differences:
1. REO – An REO, or a real estate owned property, is a property that is owned by a bank. They higher a listing agent to sell the property in the MLS (multiple listing service). I specialize in helping buyers find these properties.
2. Bank Owned – This phrase is self-explanatory. Actually, it refers to an REO. It is just a simpler way of saying the same thing.
3. Foreclosure – This refers to the termination of an owner’s right to stay in a property. Property is sold at an auction to pay off debt(s). In the current market conditions, a foreclosure auction does not typically have adequate bids to cover all liens. So, the property goes back to the bank and is sold as an REO.
4. Short Sale – This is literally a ‘pre-foreclosure’. The owner is late on the mortgage and lender is starting a foreclosure process. The seller tries to market the property in the MLS. If they find a buyer the seller brings an offer (written contract) to the lender and asks the lender to forgive the debt owed beyond the offer. Let me give an example; Property is worth $200,000. However, the owner owes $250,000. The seller brings a potential buyer’s offer to the lender and asks that the lender accept the offer as payment in full by forgiving the remaining $50,000 owed. For more information on short sales click-here.
Does the title to the property come free and clear?
Yes, the property will be transferred to you free and clear of all liens.
Why do these properties offer such a great deal?
A bank has to sell. Remember, they loaned money against this property and the last owner stopped paying the mortgage. They didn’t want to own this property. However, now that they do own it they want to sell it and quickly. They are not trying to time the market or rent it out. They want to sell NOW.
Does the bank have any disclosures about the property?
The bank does not know anything about the property. They lent money against the property and that did not go so well.
How quickly will the closing occur?
A typical closing is 30 days. From the seller’s standpoint … the sooner the better. Each day they own the home it limits their ability to do what a lender does best … lend $$$. So, if you are able to close quickly this is an advantage. This usually applies to ‘cash’ buyers.
Why do these properties offer such a great deal?
A bank has to sell. Remember, they loaned money against this property and the last owner stopped paying the mortgage. They didn’t want to own this property. However, now that they do own it they want to sell it and quickly. They are not trying to time the market or rent it out. They want to sell NOW.
Who does Tim work for?
I work for you, the buyer. In all cases, I am paid by the seller but have complete loyalty to YOU my client. I NEVER list properties for the banks. Instead, I help buyers purchase them. My loyalty is with my buyer.
If I decide to purchase bank owned property elsewhere, can Tim help me find a qualified agent?
Absolutely. Just contact me and I will find an REO expert in your desired location.
How many REO properties are for sale in Collier County?
About 400-450. There are some new ones that come on each day and some that sell. The number of REO’s seems to have been steady at this level.
7 REO Secrets
- My eBook (pdf)
Buying REOs - A guide to buying bank owned properties
7 Steps to Close - Taking you through the closing process step by step
FAQs - Your most common questions answered here
What is a Short Sale? - Short Sales Explained
LeeBankOwned - View Bank Owned Properties In Lee County (Estero, Fort Myers, Cape Coral, Lehigh Acres, etc.)
